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.
Category: Equity
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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.
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Carso Set to Delist Cicsa
Carlos Slim’s Grupo Carso has raised its stake in the Carso Infraestructura y Construccion (Cicsa) construction subsidiary to 99.88% through a buyback offer, allowing it to proceed with a delisting of the company. Carso spent MXP6.77bn ($533m) to buy up 825.4m shares, or 32.82%, through an offer closed last week. It paid MXP8.20 per share.
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Brazil’s JBS Readies Share Exchange, Vigor IPO
Brazilian meatpacker JBS plans to launch an IPO for Vigor Alimentos, its dairy subsidiary, and to exchange JBS stock held by its own shareholders with newly issued Vigor shares. The company has filed the IPO and the voluntary tender offer plans with Brazil’s market regulator CVM. JBS argues the move will unlock value at its dairy unit which, based on comparable companies, should trade at higher multiples than JBS shares. JP Morgan advised on the exchange offer, but it remains unclear whether the bank will be mandated for the IPO. JBS board members are expected to meet once again to determine the valuation for Vigor and the offer’s exchange ratio. An appraisal report conducted by Bradesco BBI and made public by JBS, calculated Vigor’s equity value measured at book to be BRL1.19bn ($690m) and anywhere between BRL1.135bn ($657.6m) and BRL1.25bn ($723m) using a discounted cash flow valuation. Barclays Capital notes that JBS shares now trade at 7.9x EV/Ebitda versus an 8.4x EV/2012Ebitda for Vigor based on Bradesco’s appraisal. The deal could unlock roughly BRL89m in equity, according to Barclays. The bank estimates the swap ratio could be 1:0.58 and the price for Vigor shares could range between BRL11.35 and BRL12.48 per share. The Vigor shares would be listed on Brazil’s Novo Mercado.
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Larger EM Flows Overshadow LatAm Equity
EM equity funds lured an impressive $5.8bn in flows during the week ending February 8, overshadowing the token $50m seen going into LatAm stocks, according to EPFR. This comes after Brasil Travel was forced to pull its IPO last week, dampening hopes of a revival in this space anytime soon. Still, according to Lipper, LatAm funds were clear outperformers with a 16.91% return during the week ending February 9, outgunning most funds in its class with exception of India region funds which leapt 25.90% during the same period. Meanwhile, EM funds gained 14.47%, while global small and mid-cap funds jumped 12.59% on the week.
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Brasil Travel Shelves IPO Indefinitely
Brasil Travel Turismo e Participacoes has indefinitely postponed its initial public offering, dashing hopes that this issue would kick start the Brazilian IPO market this year. The company was heard citing unfavorable market dynamics. Investors pushed back in what some described as a buyers’ strike after several bids were put in below the BRL1,250-BRL1,650 range.. This comes despite what some thought were already considerable discounts to comparable companies. What this means for other IPO hopefuls remains unclear, but some bankers doubt that much activity will occur over the next month. “There is not much else,” says one banker. “I think it will be another month until we see much else.” The holdco for a nationwide group of travel-related businesses was trying to sell 170,000 primary shares and 466,500 secondary shares. Such a deal would have raised BRL1.21bn ($705m) total size if had priced at the top of the range, or BRL915m at the low end, assuming the use of a 15% greenshoe. Though the management boasts ex-BTG Pactual partner Pedro Guimaraes as chairman and is headed by Paulo Castello Branco, a former VP of Brazilian airline TAM, investors were hesitant about the company’s short operating history. Some of the 35 member businesses have been in operation for years, but they were only assembled into Brasil Travel in March 2011. An expected IPO from travel operator CVC in March or April may also have distracted buyers. Brasil Travel had planned to use the primary proceeds to grow in Brazil and in other countries in LatAm, with about 85% of the funds to be spent on acquisitions. The secondary shares were to be sold by the founders’ holding vehicle, owned by Guimaraes, the Sette family and Jose Marcilio Nunes. Barclays, Credit Suisse, Flow Corretora and Santander were managing the sale.
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Ferreyros Starts Capital Raise
Peruvian heavy machinery distributor Ferreyros has raised PES167m ($62m) in the first stage of an equity capital raise open to existing shareholders, it says. It has placed 73.36m shares at PES2.28 each, representing 98% of the 75m it plans to raise. It will continue the sale Friday through Tuesday.