Regulators have approved JBS’ proposed BRL1.19bn ($596m) spinoff of its Vigor Alimentos dairy unit, JBS says. The Brazilian beef company plans to offer a 1-for-1 share exchange for up to 149.7m shares of Vigor at a minimum price of BRL7.96 each. Further details are expected within 10 days. Bradesco is advising JBS in the process. JBS shares closed at BRL6.09 Wednesday.
Category: Equity
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Suzano Launches Follow-on
Suzano Papel e Celulose plans to raise about BRL1.5bn ($750m) in an equity follow-on, it says. The Brazilian pulp and paper company is scheduled to start marketing June 11 and price June 27. The all-primary share offer is to include 80.0m ordinary shares and 164.9m preferred shares. Such a sale would raise BRL1.56bn at Wednesday’s BRL6.36 preferred share close, if the use of a 15% greenshoe is assumed. Suzano is raising funds to strengthen its capital structure. BTG Pactual, Itau and JPMorgan are managing the sale. Separately, Suzano has taken out a BRL2bn 2018 standby facility with BTG.
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Iochpe Plots FO
Brazilian commercial and light vehicle parts producer Iochpe-Maxion is planning a primary equity follow-on, the company says, without giving additional details. “The realization and conclusion of the offer, as well as its exact structure, are subject to the approval by the company’s board and the conditions of the domestic and international capital markets,” the company says. Ichope needs fund for its international expansion plans. In November, it spent $195m on Mexican Grupo Galaz, and $725m on the acquisition of US-based auto-parts supplier Hayes Lemmerz. Iochpe shares closed Tuesday at BRL27.25.
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Petroperu Confident on Project Funding
With the $1.7bn upgrade to the Talara refinery on the horizon, Petroperu’s president is confident the markets will be available for funds. “We believe that we will be able to raise capital regardless of the format that is chosen. Peru has a strong economy and is highly attractive to investors,” Humberto Campodonico tells LatinFinance. The official adds that the final decisions should come as soon as later in the second quarter. A portion is expected to come from the sale of as much as 20% of the company on the Bolsa. Petroperu lists on the Bolsa, which requires it to adhere to the standards of the local regulatory commission, but does not trade. Originally expected by midyear, the deal has been delayed until at least the fourth quarter, finance ministry officials have said. The government had wanted to increase the valuation of the company, seen at around $1bn. Other spending could also be in the cards for the state-owned oil producer, including participation in the construction of a $3.8 billion southern gas pipeline running from the Camisea fields 1,000km south to the port city of Ilo, built by Brazil’s Odebrecht. Campodonico says the company’s potential commitment could be close to $800m. Not all are convinced that spending should go beyond Talara. “The state should not be involved in construction of the new pipeline. It is a project initiated by the private sector and should remain wholly in the private sector,” Cecilia Blume, an energy expert and top executive in the finance ministry during the government of former President Alejandro Toledo, tells LatinFinance. Petroperu could be overextending itself at a time when it should be concentrating on Talara, she says. The Talara upgrade is aimed at reducing levels of sulfur and allowing the facility to refine the heavy crude that will be extracted in the future in northern Peru. The government wants to upgrade production to 95,000 barrels per day from 65,000. Bank loans, export-import funds, and multilateral financ
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Corpbanca Details Acquisition Funding
Corpbanca plans to raise CLP269bn ($549m) through the sale of 43bn shares at CLP6.25 each, to finance the acquisition of Santander’s Colombian assets. The capital increase was approved in April, for up to $650m-equivalent. The Chilean bank agreed to buy Santander’s Colombia unit in December for $1.16bn, a transaction with an implied multiple of about 2.7x book value. Corpbanca is aiming to complete the share sale by the end of June.
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LDC Bioenergia Joins IPO Lineup
LDC Bioenergia, the Brazilian sugar, ethanol and bioenergy unit of Louis Dreyfus Commodities, has filed for an IPO, according to the CVM. It plans the sale of primary shares and of secondary shares owned by an investment vehicle tied to Louis Dreyfus. It does not indicate the specific amount to be raised, or the timing, though a filing this week would imply a launch in mid to late June. LDC is raising funds for its expansion plan and to repay debt. The issuer has 13 plants in operation, with 40m tons of processing capacity and 1,000 megawatts electric generation capacity, and plans to grow in the areas of sugar and ethanol production and energy generation. Bradesco and JPMorgan are global coordinators on the sale, and Banco do Brasil, Banco Votorantim, Itau and Santander are bookrunners. Starting operations in 2000, the issuer has grown through acquisitions, most recently that of Santelisa Vale in 2009.
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Markets, Governments Challenge Agribusiness
With demand pushing farmland prices higher, and in some cases spooking politicians, LatAm agribusiness operators are broadening their geographies. Though fundraising hasn’t been easy, some – including Brazil’s LDC Bioenergia, which made initial IPO filings Thursday – are planning to give the markets a try. Farmland plays have pushed land prices in Brazil and Argentina to new heights, and large operations such as Adecoagro, BrasilAgro, and SLC Agricola have been challenged by governments worried about purchases by large international players and sovereign wealth funds. “The Chinese and Arab interests would have to hire locals to work the land and pay export taxes for the products they send overseas just like everyone else,” Julio Piza, CEO of BrasilAgro, tells LatinFinance. BrasilAgro is controlled by Argentina’s Cresud, and has been forced to suspend all land purchases in Brazil. However, the company still has plenty of land for future transformation that can continue to generate returns over the next 2 years without having to increase its land stock, he says. “That’s not to say we wouldn’t like to buy more, but 2 years gives us time to adapt to new legislation,” Piza adds. Argentina passed a law late last year banning foreign-controlled companies or individuals from holding more than 1,000 hectares in the country’s agriculture-rich areas, and Brazil also limits foreign-owned land holdings to no more than 15% of the national territory. “Adecoagro can’t buy any more land in Argentina. In Brazil, when rules are finally clarified, even a new restriction will be better than what we have today,” Alessandro Baldoni, analyst at Deutsche Bank, tells LatinFinance. The legal obstacles have piled on top of the European financial struggles, fears of slower economic growth in Asia, and a drought in Argentina and Brazil, as one more issue giving equity investors second thoughts about the sector. Future growth will have to come from other countries in South America. The company ha
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Brazil Pharma Defines FO
Brazil Pharma plans to begin investor meetings June 4 for an approximately BRL600m ($306m) equity follow-on, ahead of a June 21 pricing, it says. The retail pharmaceutical company plans to sell 45m primary shares, and 7m secondary shares owned by members of the Silveira family. This implies a BRL628m sale, based on Wednesday’s BRL10.51 close, assuming a 15% greenshoe. A 20% hot issue is also available. Half of the primary proceeds would go to strengthening the issuer’s capital structure, 40% to new acquisitions, and the remainder to making improvements to existing operations. BTG Pactual, Bradesco and Citi are managing. Brazil Pharma raised BRL465.75m in its IPO last year, done through Bradesco, BTG, and Morgan Stanley.
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Pinfra Equity Sale Seen Close to Launch
Promotora y Operadora de Infraestructura (Pinfra) is heard beginning investor pre-education meetings for its equity follow-on, ahead of a formal launch as soon as next week or the following week. The Mexican infrastructure firm is expected to raise in the neighborhood of $300m-equivalent. Primary proceeds would go toward general corporate purposes, including greenfield and brownfield construction. The deal will also include secondary shares sold by members of the Penaloza family and various investment funds. JPMorgan, Credit Suisse, and Ixe are managing. Pinfra shares closed Friday at MXP62.26 ($4.62).
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Queiroz Preps Oil Services Spinoff
Brazil’s Queiroz Galvao is said to have made preliminary filings for an IPO of its Queiroz Galvao Oleo e Gas oil services business, according to ECM participants following the process. An official filing has not yet been made. It is estimated that a transaction should come this year, at possibly more than $1bn. Bank of America Merrill Lynch, JPMorgan and Itau are heard named lead managers. The group’s exploration and production unit, Queiroz Galvao Exploracao e Producao, made its public equity debut in February 2011, raising BRL1.52bn.