Continuing with its multiyear plan to strengthen finances, Brazil’s Fibria is planning to raise BRL1.25bn ($710m) in an equity follow-on, and has agreed to offload land assets to raise $235m, it says. The pulp and paper producer is preparing to file for an equity offering to raise additional funds, but does not offer any additional details. Barclays spots the offering at 17.6% of Fibra’s market cap, it says in a report. It would be the first offering under the new Fibria name, though both Votorantim Celulose e Papel and Aracruz are longtime Bovespa members. VCP last issued for $253m equivalent in 2003, and VCP for $234m equivalent in 1995, according to Dealogic data. Fibria shares closed at BRL15.20 Thursday. Fibria also has agreed to sell forestry assets in the southern part of Bahia state Corus Agroflorestal, for BRL235m. Corus also has the option to buy Fibria’s 33% stake in the Bahia Produtos de Madeira sawmill, located in the same region. It hopes to finalize the land sales by June. “Although the announced measures will help the company to respect covenants in 1Q and 2Q 2012, we do not see them as the ultimate solution for leverage,” Barclays says. The shop sees net debt to Ebitda reaching 3.8x, under a bullish pulp price scenario, noting it would prefer 3.0x-3.5x.
Category: Equity
JBS Ups Stake in Pilgrim’s Pride
Brazilian meatpacker JBS has paid $143.3m to increase its stake in US chicken producer Pilgrim’s Pride to 68%, through the most recent company share offering. Pilgrim’s sold 44.4m new shares at $4.50 per share to revamp its capital structure, and through that offer, JBS spent $134m to maintain its original 67.2% stake, a Pilgrim’s spokeswoman confirms. JBS spent an additional $9.3m to raise its stake to 68%, based on company data. The Pilgrim’s spokeswoman declined to offer additional details and JBS officials could not immediately be reached for comment. Pilgrim’s managed to secure $200m from the sale of the new shares. JBS first acquired a stake in Pilgrim’s in 2009 with the financial backing of Brazil’s BNDES development bank.
CME, Bovespa Strike Cross-Listing Deal
The Chicago Mercantile Exchange Group (CME) has struck a deal with Brazil’s BM&FBovespa (BVMF) for the cross listing and licensing of traded index- and commodities-based futures, it says. Under the deal, the CME will list dollar-denominated futures of the Bovespa, while the BVMF will offer dollar-denominated S&P 500 index futures settled in BRL. The Brazilian market will also list the Chicago Board of Trade’s Mini-sized Soybean futures and the New York Mercantile Exchange’s Light Sweet Crude Oil (WTI) futures in the second and third quarters of this year, respectively. Officials at the CME were not immediately available for comment. A BVMF investor relations officer says the deal involves an agreement to share the revenue generated by the trading of these securities, in which the owner of the security will take the larger share of the revenues. He declined to offer details of the deals, however. The BVMF official said the market will also pay a license for the use of the S&P 500 product and for the market data generated by the trading of the futures contract at the CME.
Petros Aims to Float Pulp Unit
Petros, the pension fund for Petrobras employees, is analyzing the possibility of an IPO for its Eldorado pulp and paper producer, a spokeswoman says. There were no additional details immediately available. The fund is also part owner of Investimentos e Participacoes em Infraestructura (Invepar), which has previously said it would look to IPO as well. Following the recent BRL16.21bn winning bid for Sao Paulo’s Guarulhos airport in partnership with South Africa’s ACSA, the spokeswoman confirms that an IPO is still in the planning stages. Bankers following the sale say no managers have been chosen and a sale would be at the end of 2012 at the soonest. Such a deal could raise BRL5bn ($2.84bn).
Brazilian Furniture Maker Plans IPO
Unicasa Industria de Moveis, a Brazilian furniture manufacturer, has registered for an IPO. The company’s documents do not indicate the size or timing of the sale, which is to involve primary shares, as well as secondary shares sold by controller Alexandre Bartelle and members of the Zietolie family. Unicasa, which through its Dell Anno, Favorita, New and Telesul brands targets all levels of the Brazilian income ladder, is raising funds for expansion, particularly in products aimed at the country’s C class. A portion of the primary proceeds would also be used to pay a dividend to shareholders, according to the filing. Unicasa claims to be Brazil’s sector leader in terms of gross revenue – BRL402m ($228m) in 2011 – and that it has the potential to open 566 new stores throughout Brazil, including 457 for its New brand targeting the C class. The issuer, founded in 1985 and based in Bento Goncalves in the state of Rio Grande do Sul, posted BRL80.4m in Ebitda in 2011, up from BRL72.9m in 2010. BTG Pactual, Itau and Santander have been hired to manage the process. Brazil’s IPO pipeline is building, as is optimism that the country could finally price its first IPO of the year as soon as next month. The list includes the debut of rental car provider Locamerica and of oil services provider Seabras, as well as the highly anticipated sale from BTG Pactual that could top BRL2bn.
Brazil’s Embratel Plots Net Tender, Streamlining
Embratel has reached 92.2% of control of operator Net Servicios de Comunicacao, and plans to launch a tender for the remaining shares, delist them and prepare a reorganization of Embratel’s businesses in Brazil. Embrapar, the parent of the Carlos Slim-owned telecom, increased its stake in GB Empreendimentos e Participacoes, the company that controls Net, by 5.5% to a total of 54.5%, it says, to reach the 92.2% level. It plans to soon offer holders of all Net shares a maximum of BRL26.04 ($14.80) per share, adjustable for changes in the DI rate until the time of the offer. Should the price of the valuation of shares exceed the maximum price offered, Embrapar could choose to cancel the tender. Officials at Net and Embratel could not immediately be reached for additional comment as to how many shares Embratel targets and what it would cost. Following a delisting of Net, Embratel says it would examine a restructuring.
Builder Launches Colombia IPO
Colombia’s Construcciones El Condor has launched its COP150bn-COP162bn ($85m-$91m) IPO, starting a sale period that will close March 27, with final allocations shortly after. The engineering and construction company is selling 106m shares at COP1,415 each. The sale represents an 18.75% float, which would reach 20% if a 9m overallotment is exercised. Bancolombia is managing the transaction.
CPFL Renewables Ponders IPO
CPFL is studying the possibility of an IPO for its CPFL Energias Renovaveis business, according to a person following the matter. There is not yet an indication of the size, timing or which banks might be involved. The company is said to seek funds for what it sees as a new phase of growth ahead in Brazil’s renewable energy sector. CPFL has 309MW in hydroelectric, wind and biomass generation in operation, plus another 1,518MW in development. Last month CPFL agreed to pay BRL1.062bn ($669.8m) for Bons Ventos, a company that owns 4 operating wind farms.
Fibra Uno Targets $600m Retap
Mexico’s Fibra Uno is looking to raise more than MXP8bn ($615m) in a reopening of its domestic real estate income trust, known as a Fibra, and expects to price March 22, according to regulatory filings. The issuer has indicated it will sell 325m new shares, including a 48.75m overallotment, which would mean a MXP8.13bn deal at Tuesday’s MXP25.00 closing price. The sale would raise funds for Fibra Uno, the only Fibra launched since the creation of the asset class, to acquire new properties. The sale aims to raise substantially more than the MXP3.17bn IPO held last year. Santander and BBVA are global coordinators, with Credit Suisse also on an international 144a/RegS portion. Protego and Actinver are joining on a domestic portion. In January, Fibra Uno agreed with real estate investor MexFund to acquire up to 23 properties in exchange for shares in the Fibra, allowing the total portfolio to reach as many as 40 properties. Starting with 16 at the time of the IPO, Fibra Uno added a 17th last year, and counts on MXP3.6bn in revolvers to help fund acquisitions. Put together by a group of property owners led by CEO Andre El-Mann, the fund saw delays in getting the asset class’ debut off the ground in the IPO, with the issuer reducing the size and price and agreeing to put in its own equity. Its assets include industrial, commercial, office, and mixed-use properties located throughout Mexico.
Banco Galicia Eyes Card IPO
Argentina’s Banco Galicia is planning an IPO for its Tarjetas Regionales credit card subsidiary, it says. The bank has internally approved a sale of up to $200m in the foreign and domestic markets. The timing is unclear, as there are still several regulatory measures to go through. Bank of America Merrill Lynch, JPMorgan and Morgan Stanley have been advising on the process, a bank official says. Tarjetas Regionales is a holdco for brands including Tarjeta Naranja, Tarjeta Nevada and Tarjeta Mira, as well as a processor and collection company serving them.