Banco de Chile is set to raise CLP67.91bn ($145m) through a capital increase June 28, it says. The bank plans to issue 1.10bn shares at CLP62.00 each.
Category: Equity
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Caixa Preps RE Fund
Brazil’s Caixa Economica Federal has filed to raise a BRL200m-BRL300m ($99m-$198m) Fundo de Investimento Imobiliario (FII) real estate fund in Brazil’s domestic market, according to the CVM. The vehicle, which has an open-ended timeframe, will invest in real estate assets. The bank does not indicate the timing or expected return profile. Caixa is managing the sale itself, along with Rio Bravo Investments, who is also administrator.
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Iochpe Gives up FO Plans
Brazilian commercial and light vehicle parts producer Iochpe-Maxion has postponed plans for a primary equity follow-on, it says, based on poor market conditions. The deal had not advanced to the stage of an official filing. Iochope says it has adequate funds on hand for its plans. The company has been busy expanding, including acquisitions in Mexico and the US last year. Its shares closed Wednesday at BRL24.70 ($12.17). A rough time for the Bovespa and other global indexes is challenging the plans of several issuers in the region. Bankers are skeptical about Brazilian IPOs targeting July pricing, with the largest follow-ons having the best chance of getting done.
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Cemig Confident on Taesa Share Sale: CFO
Brazil’s Transmissora Alianca de Energia Eletrica (Taesa) will brave market conditions and proceed with its planned equity sale of up to BRL2.0bn ($990m), despite a questionable new issuance market. “The deal is going forward and we believe in the attractiveness and interest of this company. There is no reason for postponing under current market conditions,” Luiz Rolla, CFO at Taesa parent Cemig, tells LatinFinance. Rolla says despite volatility in the market, the utilities sector is considered a high-growth, defensive sector with stable and predictable cash flows. “This is our case, with investors turning to the power industry during the crisis and flocking to utility stocks, as the dividend policy is stable and dividend yield has been high,” the official adds. Taesa officially registered the deal this week, and now awaits the 30-day approval period before launch. Taesa will offer its units in the sale, classified as a “Re-IPO,” given the illiquidity of its outstanding shares, consisting of one common and two preferred shares. It plans to set a price range at launch, according to its regulatory filing, as if it were an IPO. Proceeds are marked for acquisitions and projects. Bank of America Merrill Lynch, BTG Pactual, Banco do Brasil, Goldman Sachs and Santander are managing the sale. Ahead of the approval, Taesa plans to raise BRL1bn in 1-year domestic market bridge debt, with proceeds to be used to retire debt used in the purchase of a stake in Abengoa Brasil. Banco do Brasil, BTG Pactual and HSBC are managing. The European crisis has raised opportunities for consolidation, and Cemig officials say Taesa is prepared for more opportunities to acquire Brazilian assets owned by European companies, but decline to provide further details on M&A plans. “Our strategy of growth through acquisitions is a very strong tool used over the last 10 years and the results are there. We are always looking at how to maintain a high rate of growth through acquisitions,” says Cemig boa
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Clothing Retailer Completes Share Repurchase
The controlling shareholder of Brazil’s Marisol has concluded a BRL201m ($99m) share repurchase, bringing its control to 98.8%, Marisol says. GFV Participacoes has acquired through a public auction 15.1m common shares and 50.8m preferred shares at BRL3.05 each, representing a 59.0% stake. The preferred shares closed at BRL3.00 Tuesday, and common shares at BRL3.04.
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BNDESPar Plans Renova Investment
Brazil’s Renova Energia is negotiating with BNDESPar for an investment of as much as BRL315m ($154m) in the renewable developer, Renova says. The equity arm of Brazilian development bank BNDES would buy new shares at BRL28 each. The shares closed at 31.99 Monday. After shareholder approvals, Renova’s management board would evaluate an additional capital raise. Renova got a BRL297m loan from BNDES in October to support the construction of 5 wind farms in the state of Bahia.
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PDG Board Approves Vinci Entry
PDG Realty’s board has approved a plan from private equity firm Vinci partners to raise BRL800m ($390m), the homebuilder says. Under the proposal, unveiled last week and aimed at strengthening PDG’s finances, Vinci would raise BRL800m through the sale of warrants entitling each holder to one new share and one convertible debenture at BRL4.02 each. This represented an 11.4% premium to the previous closing share price and a 20.7% premium to Monday’s BRL3.33 close. The debentures acquired under the plan could be converted after 4 years into one additional new share at a minimum of BRL6.00 per share. Vinci would contribute between 54.8% and 81.4% of the fresh capital under the plan. In a change from the original Vinci proposal, PDG modified the lock up period to 4 years from 2. The plan is still subject to shareholder approval.
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Steelmaker Wraps up Follow-on
Colombia’s Acerias Paz del Rio has finalized its equity follow-on, raising the COP271bn ($155m) it targeted. The steelmaker controlled by Brazil’s Grupo Votorantim sold 9.05bn shares at COP30.00 each. The sale period ending May 25 was open during a rough period in the international markets, but being a follow-on directed towards existing holders made it easier to get done. The sale was said to go almost entirely to existing shareholders, with a demand of about 3x. Proceeds are marked for repaying debt and funding investment in a mining program. Corredores Asociados managed the sale. Votorantim owns 72% of Paz del Rio.
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July IPO Season Challenged by Sour Markets
The Bovespa and Mexican Bolsa continued to lose ground along with global equity markets last week, creating fresh doubts about the IPOs in the Mexican and Brazilian pipelines that had hoped to price before the traditional August vacation period. Follow-ons might still get done, bankers say, but the 5 Brazilians and one Mexican with filed documents now face longer odds to get a deal done in the July window. If bad news continues, a repeat of 2011, in which few deals were done in the second half, is possible. “Markets are very challenging for equities. We are unlikely to see IPO’s [from LatAm] anytime soon,” says a New York-based ECM banker. Poor US job numbers last week, as well as continued fallout in the US IPO market from the problems surrounding Facebook’s recent IPO, also don’t help the situation. “At a reasonable price, some of these deals could still get done, but if the markets soften further it will be very difficult,” another ECM banker says. A follow-on from Brazil Pharma scheduled for June 21 and Suzano, for June 27, still are likely to get done, bankers say. However, IPOs to be launched from Mexico’s Vesta and Brazil’s CPFL Renovaveis, Vix Logistica, Pague Menos, LDC Bioenergia and Manabi, some of which are in pre-roadshow marketing, may not have the same luck. For some in the pipeline, alternatives include a record amount of private equity cash deployed in the region, as well as strategic investors. Eike Batista’s gold mine unit, planning a Colombia listing for the AUX gold miner, has hired Bradesco to seek funding alternatives, according to a spokesperson, though the public sale could still happen if conditions permit. EBX has already sold chunks of itself to international strategic investors looking to get into Brazilian commodities and infrastructure plays at the pre-IPO stage. The Bovespa dropped 1.95% last week and has lost 5.91% year to date. Mexico’s Bolsa shed 0.81% last week, though it is still up 0.28% on the year. ECM volume stood at $9.04bn
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Petrominerales Clinches Converts
Petrominerales has priced a $400m convertible bond sale, it says. The 3.25% 2017 bonds are convertible in to common shares at $18.0017 per bond, representing a 35% premium to Thursday’s closing price. The shares closed Friday at CAD31.04 ($12.54). The Toronto-listed Colombian oil producer is raising money to fund a tender offer, through which it is to buy back $250m of its 2.625% 2016 bonds, at a price of 98.5. The operation leaves $272m outstanding in the 2016s ahead of a 2013 call date. ABG Sundal Collier Norge managed both the sale and the tender.