Brazil’s JHSF Participacoes has hit the 25% equity free float required by regulators, it says, through a BRL152.3m ($83.8m) follow-on sale of secondary shares. Controllers of the developer sold 26.3m shares at BRL5.83 each last week through an expedited public offering known as an advanced bookbuild. BTG Pactual managed the sale.
Category: Equity
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BTG Seen Launching Next Week
BTG Pactual has started pre-launch investor education meetings and is heard planning to launch its highly-anticipated IPO as soon as early next week. Based on the typical timetable for Brazilian equity transactions, if the deal is launched next week it would likely price the week of April 23. The deal is expected to raise BRL2.0bn-BRL2.5bn ($1.10bn-$1.37bn), but the markets will have a better idea of the total amount when the price range and number of shares to be sold is disclosed at the time of launch. The BRL2.5bn level would imply a price-to-book valuation of more than 3x, analysts say, well above peers such as Itau and Bradesco. While the consensus may be that the bank deserves a premium for its story and what it has accomplished, 3x-plus may be difficult for buyers to accept given the recent history of IPO pricings in Brazil. A 2.0x price-to-book is normal for retail-plus-investment bank competitors, investors and analysts note. BTG, Bradesco, Goldman Sachs and JPMorgan are managing the deal. Other Brazilians in the pipe could also launch as soon as next week, including fleet outsourcer Locamerica, furniture maker Unicasa, and oil services provider Seabras.
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Colombia Construction IPO Oversubscribed
Colombia’s Construcciones El Condor has received COP323bn ($183m) in orders for its IPO, it says, following Tuesday’s close of the order period. It is scheduled to allocate the transaction – and thus determine the final size of the offer – on Monday. The builder launched the offer of 106m shares March 6, at COP1,415 each, meaning an expected COP162bn sale if a 9m share overallotment is exercised. The sale represents a 20% float. Bancolombia is managing.
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Posadas Finishes Convert Sale
Mexico’s Grupo Posadas has raised MXP900m ($71m) through the sale of convertible 2014 domestic bonds in a private sale to its existing shareholders, it says. The 9.0% bonds will mandatorily convert at the maturity, and are secured by MXP300m of the hotel operator’s assets. The transaction was done to increase the company’s liquidity. The deal should lower adjusted leverage to 6.1x from 6.8x as of December 31, 2011, Fitch says.
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Chilean Driller Plans IPO
Chilean drilling services provider Terraservice plans to hold an IPO, a company official says, and aims to do so by the end of the year. The company, which is looking to expand into other LatAm markets, is still in the planning stages, but is looking to float 30%, around $50m. Terraservice had been looking at 2014 for the fundraising, the official says, though good market conditions have led it to focus on this year or perhaps early 2013. Proceeds would fund investments, most notably an entrance into Peru’s market. This expansion could later be followed by other countries, such as Colombia or Argentina. Celfin has been hired to manage the IPO process. Terraservice gained recognition through its participation in the 2010 rescue of 33 miners trapped under the Atacama Desert.
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LatAm Equity Funds Loose Cash
EM equity funds saw inflows of $782m during the week ending March 21, however LatAm equity funds dragged this total down with $119m in outflows, according to EPFR. LatAm funds saw a 2.31% loss during the week ending March 22, and are up 14.61% on the year, according to Lipper. EM funds lost 2.30% during the week and have risen 13.40% on the year. Global small and mid-cap funds, by comparison, were down 1.35% on the week, and 12.94% on the year.
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Builder Prices First Chilean IPO of the Year
Chilean construction firm Ingevec has priced a CLP12.51bn ($25.6m) IPO, the first in Chile this year. The deal was always going to be small, but it underwhelmed somewhat, with the CLP48.10 price coming below a CLP50 target and market expectations of just above CLP50. Demand was CLP69.35bn, from 382 accounts, Ingevec says. Domestic retail investors accounted for 36%, domestic pension funds for 29%, domestic non-institutional investors 20% and Foreigners 15%. Ingevec is raising funds for its engineering and construction projects, as well as to execute the investment plan for its real estate business. About 90% of the issuer’s business is construction and engineering, it says, for which it claims a $450m equivalent backlog, and the remainder real estate. The float represents about 30% of the company, with 70% remaining in the hands of a controlling group led by CEO Enrique Besa. LarrainVial managed the sale, which was originally intended for last year before market turbulence got in the way.
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PE/VC Fundraising Hits Record: LAVCA
Private equity and venture capital firms raised a record $10.3bn in 2011, 27% above 2010’s $8.1bn, according to a survey done by Latin American Private Equity & Venture Capital Association (Lavca). Brazil-dedicated funds accounted for $8.1bn of the total, with firms Gavea, BTG Pactual Vinci and Patria accounting for $7.1bn. Brazil also accounted for 50% of transactions last year. Regional funds were $1.1bn of the total committed capital, LAVCA says. Deal numbers reached $456m in Mexico, a 117% increase from 2010. Exits in the region hit $10.6bn in 2011, more than doubling from 2010. LAVCA surveys fund managers through a proprietary data collection tool. Information technology, energy, and other services, which includes fast food chains and franchises, saw what LAVCA calls “notable growth” in deals or investment value.
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Tenaris Plans Confab Minority Offer
Steel tube maker Tenaris has launched a public tender offer to buy all the outstanding shares of its Brazilian subsidiary Confab Industrial, it says, to be worth as much as BRL1.35bn ($742m). Through April 23, is offering holders BRL5.85 per ordinary share, and aims to obtain the 230.7m outstanding shares, which it says represent 56%, and delist the company. Confab common shares closed at BRL5.75 Thursday, and preferred at BRL5.80.
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YPF Plans Scrip Dividend as Politics Heats Up
YPF has approved a ARS5.8bn ($1.33bn) capitalization in attempt to appease both shareholders government, though analysts and observers take a less positive view of the company’s and industry’s outlook under President Kirchner. If approved by shareholders next month, the oil producer’s plan would offer shareholders the option of receiving stock, or a scrip dividend, which would be 10% higher than the 2010 dividend. As proposed, the capitalization would let the company keep a rich dividend chest that could in the future be used to finance additional investment in the sector, while also giving shareholders a stake in that cash in the form of shares they can later turn around and freely sell in the market. With the Argentine government pushing for more investment in oil exploration and production, the government’s representative on the YPF board voted against the proposal. Government officials have recently made conflicting statements regarding the possibility of nationalizing YPF should the company fail to toe the state line. In a recent report, Barclays reckons the government may yet move to nationalize the company. “We think that as long as the government is able to sell bonds through state agencies to get the necessary amount of dollars to import energy, the energy trade deficit will find financing and the effect on growth will be limited. But the administration may be looking for a more drastic solution, including the possible nationalization of YPF,” the shop says in a report. Over the past 6 months, YPF’s ADRs have lost 20.44% compared to a 23.30% rise of the S&P 500 index and the progression of political events does not look encouraging. Already the Kirchner administration has eliminated 2 tax breaks for the energy industry that according to Moody’s amounted to $404m in annual tax savings for the companies. Moreover, late last year, the government also forced all energy companies to repatriate 100% of their foreign exchange proceeds, instead of keeping 70% as pr