BTG Pactual is said to be close to filing for its long-awaited IPO, seen by the markets raising BRL1bn-BRL2bn ($588m-$1.2bn). JPMorgan and Goldman Sachs are heard having joined BTG’s own ECM team in managing the sale thus far, with the possibility to add another bank. With the Bovespa up 16.2% this year through Tuesday, and many issuers rushing to the market, now may be as good a time as any to float the roughly 10% piece of the bank to raise funds for its continued expansion. BTG was able to delay the IPO plan somewhat thanks to the $1.8bn private sale of 18.65% to a group of private equity funds, sovereign wealth funds, family vehicles and a few of the bank’s own senior management, done in late 2010.
Category: Equity
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Locamerica Readies IPO
Brazilian vehicle fleet rental company Locamerica is planning an IPO to raise more than BRL200m ($118m). The issuer plans a BRL200m primary share portion, and Banco Votarntim’s BV Empreendimentos e Participacoes private equity fund will sell 75% of its holdings, in a secondary portion, expected to be at least as big as the primary portion, indicating a minimum BRL400m size. Locamerica does not give an estimation of the total size and the timing. It plans to use 60% of the proceeds for expanding its fleet and the remainder for working capital. Banco do Brasil, Banco Votorantim, Bank of America Merrill Lynch, BTG Pactual and Itau are managing the sale. It is expected to file shortly, and join a pack of what bankers say is as many as 10 upcoming Brazilian equity sales. The group, aiming for April or May pricings if conditions hold, may include IPOs from BTG Pactual, Seabras, and Isolux and follow-ons from Taesa and Qualicorp. Travel agency CVC has let its IPO filing from late last year run out, according to the CVM, but sources close to the deal insist the company still plans to resubmit and proceed with a sale.
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Equity Inflows Ease
EM equity funds saw inflows of $348m during the week ending February 22, with LatAm equity accounting for $29m of that total, according to EPFR. Meanwhile, LatAm funds saw a 0.64% return during the week ending February 23, and are up 18.01% on the year, according to Lipper. EM funds gained 0.36% during the week and have risen 14.95% on the year. Global small and mid-cap funds, by comparison, are up 0.71% on the week, and 14.14% on the year.
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Qualicorp Holders Plan Selldown
Carlyle Group and a Qualicorp official are planning a secondary share equity follow-on in the Brazilian health insurer, Qualicorp says. There were few immediate details, but a deal of at least BRL850m ($497m) is heard in the works. Bank of America Merrill Lynch, Bradesco, Credit Suisse and Goldman Sachs, managers of Qualicorp’s BRL1.08bn IPO last year, are expected to manage the offering. The two selling shareholders are Carlyle’s holding vehicle and a vehicle owned by founder and board president Jose Seripieri Filho. The two were the sellers in the BRL731m secondary portion of the IPO. Qualicorp shares closed Thursday at BRL16.00.
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Taesa Plots Share Sale
Brazil’s Cemig is heard moving ahead with an equity sale for its Transmissora do Atlantico de Energia Eletrica (Taesa) transmission unit. BTG Pactual and Bank of America Merrill Lynch have been hired to manage the deal, according to ECM sources familiar with the plan. The follow-on sale would in many ways function as an IPO for the relatively illiquid shares. Cemig bought Taesa, then known as Terna Participacoes, in 2009 from Italy’s Terna, and has indicated it would look to increase the unit’s float. Taesa shares closed at BRL45.21 Thursday.
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Chilean Builder to Restart IPO Plans
Chile’s Ingevec plans to resume its IPO plans, which had been put off in August. The construction and engineering company gives no fresh details, saying only that its board will decide on the resumption of the process at a March 23 meeting. The issuer had been looking last year for about $30m-equivalent to fund expansion projects, with LarrainVial hired to manage the deal.
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Vapores Set for Port Spinoff
Chile’s Compania Sudamericana de Vapores is set to spinoff its Sudamericana Agencias Aereas y Maritimas subsidiary, which will control its logistics, ports and storage operations, it says. The shipping company will give 1.12 shares in SAAM for each Vapores share. The move was enabled by the completion of a $1.2bn capital increase, of which the $412m second preferential stage closed last week. Luksic family holding vehicle Quinenco is now the controlling group, with 37.4% of the company’s stock, after subscribing to $547m of shares. In addition, $100m was subscribed by Marinsa and $553m by other shareholders and third parties. Celfin managed the equity raising process, done to strengthen the company’s balance sheet amid difficulties in the global shipping industry.
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LatAm Equity Pales Beside Bigger EM Flows
EM equity funds brought in $2.19bn during the week ending February 15, but LatAm equity accounted for just $34m of that total, according to EPFR. Meanwhile, LatAm funds saw a 0.25% return during the week ending February 16, and are up 17.29% on the year, according to Lipper. EM funds gained 0.05% during the week and have risen 14.58% on the year. Global small and mid-cap funds, by comparison, are up 0.65% on the week, and 13.32% on the year.
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Regional Equity Issuers Primed for Restart
With many would-be equity issuers close to registering fresh financials, bankers expect new filings in the region as soon as the end of this week and possible pricings as early as March. Two Brazilian IPOs were postponed earlier this month, but reasonably successful sales from Cementos Pacasmayo and Bancolombia have generated optimism that follow-ons can restart the market. The question is whether investors and issuers can meet eye to eye on pricing given how disagreements over valuations have wrecked past transactions. “Deals can get done this year. It’s just a matter of finding the right valuation,” says a New York ECM banker. Bankers see at least 8 new pricings in the March/April window. Colombia may see the first launch, with Construcciones El Condor targeting the week of March 5 to start the sales process for its IPO if regulators approve the transaction in time, says a company official. The engineering and construction company plans to raise COP150bn-COP200bn ($84m-$112m) through an expected 15%-20% float. Bancolombia is managing the transaction. A $100m-plus-equivalent follow-on from Acerias Paz del Rio, a steelmaker that is part of the Brazil’s Votorantim group, could follow. In Chile, Cencosud is also considering a follow-on involving the sale of ADRs, as part of a $2bn total capital increase. JPMorgan and UBS are heard to have the mandate, with Santander and BBVA expected to work on the local portion. Cencosud officials did not return requests for further comment. The Mexican market is still awaiting a filing from Grupo Alfa’s Alpek unit, which had been heard aiming for the January/February window. Regional ECM volume was at $2.07bn through Friday, according to Dealogic, down from $5.66bn during the same period in 2011.
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Duratex Seeks Convert Funding
Brazilian wood and metal products company Duratex plans to raise BRL100m ($58m) through the sale of convertible debentures to its shareholders. The 2017 bonds would be linked to inflation and pay a fixed rate of 6%. The month-long subscription period begins today. The bonds are convertible at the holder’s discretion for 10 shares at BRL12.87 per share. Itau is managing the sale. The sale follows the issue of similar bonds as part of a BRL273m financing package with BNDES announced last month.