Pacific Rubiales has converted CAD236m ($232m) of its convertible debentures via an early conversion offer that drew participation from holders of 98.9% of the 8% 2014 bonds. In the process it will issue 20.5m shares, of which 2m represent an incentive payment to accepting holders. For each CAD1,000 ($988) face value tendered, the Toronto-based Colombian producer offered face value in shares plus 86.7533 additional shares. This compares to the original conversion rate of 77.94 shares per CAD1,000 face value. The offer closed Tuesday. Pacific Rubiales says it is undertaking the offer “to bring maximum balance sheet flexibility to carry out its acquisition strategy. RBC managed the process.
Category: Equity
Posted inDaily Brief
Bancolomia Mulls $150m Sura Investment
Bancolomiba is considering a $150m investment in pension and insurance assets that Grupo Suramericana recently acquired from ING, the bank says. Sura had indicated the possibility that the bank would participate as a co-investor along with the IFC, Sociedades Bolivar and UBS, its advisor on the acquisition. Bancolombia acted as bookrunner on the recent COP3.5trn ($1.8bn) equity follow-on that helped fund the purchase of ING’s assets. “The operation is an interesting business opportunity, aligned with the ongoing interest that Grupo Bancolombia has in strengthening its presence in the financial sector, including pensions,” it says. Final details are still to be determined. Sura brought in the co-investors as its follow-on fell short of a COP3.9trn target. UBS came in for COP975bn, Bolivar for $400m and the IFC $200m. Sura agreed to buy the ING assets in July for $3.76bn.
Posted inDaily Brief
UOL Readies Public Tender, Delisting
Brazilian internet provider Universo Online (UOL) is readying a public tender offer to buy back the 15.26% of its shares that are outstanding so that it may proceed with a previously announced plan to delist. UOL will offer holders of the 18.3m preferred shares BRL19.90 ($11.05) per share in a process to be held December 29. This indicates it would spend BRL365m if all offers are accept. The price compares to a BRL13.67 average for the past 12 months and a BRL16.97 average since the buyback was initially announced in August, UOL says. Bradesco is managing the transaction.
Posted inDaily Brief
BlackRock Buys HRT Stake
BlackRock has acquired a 5.15% stake in Brazilian oil company HRT Participacoes, HRT says. The world’s largest asset manager notified the E&P company that it had acquired 299,900 shares, or more than 5% in the company, according to HRT. Such a stake would be worth BRL177m ($94m) at Monday’s BRL590 close. It appears BlackRock acquired the shares gradually since no large share sales have been registered so far, says Luis Lima, an investor relations officer at HRT. BlackRock officials could not immediately be reached for comment. The institutional investor has announced its new ownership position at a time of much activity for HRT. Earlier this month, the company struck a $1bn deal with Anglo-Russian oil company TNK-BP for the sale of a 45% stake in an oil exploration concession in the Solimoes basin.
Posted inDaily Brief
Sura Gets Support on Vital Equity Funding
Grupo de Inversiones Suramericana’s (GrupoSura) COP3.5trn ($1.8bn) equity follow-on last week helped it complete the funding requirements for its acquisition of ING’s LatAm assets in what the company described as Colombia’s largest equity raise by a non-government entity. But tough market conditions have meant that the issuer required the support of a number of co-investors to raise the desired equity financing and stave off any threats to its investment grade rating. This includes Switzerland’s UBS which bought 30m of the shares for a total of COP975bn ($502m), or about a quarter of the entire offering. “An agreement with UBS was already in place, as they were acting as financial advisor in the negotiation process,” a Suramericana spokeswoman says. She adds that the follow-on was done during challenging conditions, but the issuer is satisfied with the result. Indeed equity financing was seen as the best way to ease pressure being exerted by the ratings agencies like S&P, which placed the company’s BBB minus rating on creditwatch earlier this year after noting that incremental indebtedness from the acquisition could impact GrupoSura’s credit profile. Last week GrupoSura also announced that Bancolombia, which is part of the conglomerate’s investment portfolio, was undergoing the required analysis and internal approvals to become a co-investor as well. Bancolombia, along with Santander, led the transaction, while UBS was one of the original acquisition bridge lenders along with BBVA, Deutsche Bank, HSBC and JPMorgan. This follows similar moves by the IFC and Sociedades Bolivar which respectively took 5% and 10% stakes in the pension and insurance business acquired from ING for $3.76bn.Local brokerage Bolsa y Renta calculates that after minority stake investments, the FO and cash on hand, GrupoSura needs to raise just COP1trn ($500m) in debt, though Bancolombia’s contribution may well cover a large portion of that. “We believe that it shouldn’t lose its investment grad
Posted inDaily Brief
Santander Targets Early December for Chile FO
Santander Chile is targeting the week of December 5 for a secondary share equity follow-on that is expected to raise close to $1bn. The Spanish parent is looking to sell 7.8% of the Chilean unit held by the Teatinos Siglo XXI Inversiones vehicle, to strengthen its capital position, as part of a larger selldown that also involves reducing its stake in its Brazilian operation. But completing a deal before the year-end could prove tricky given the size of the transaction and questions over whether Santander Spain will be forced into further sales in the future. “In this scenario, with a weak progress in the operational indicators and the possibility of selling a larger stake if the Spanish situation should deteriorate further in the future, it is unlikely that we will see a significant participation from [domestic] institutional buyers,” local Chilean shop BCI says in a report. With Santander looking to sell 14.74bn shares, represented by 14.19m ADS, the transaction could reach $930m in size based on Tuesday’s closing ADS price of $65.50. Official timing has yet to be released, but sources familiar with the deal say the issuer is considering the week of December 5, if market conditions allow. The offer is to include an international and domestic portion. Santander, Bank of America Merrill Lynch and Credit Suisse are managing the international portion, while Santander and LarrainVial will handle Chilean orders. The announcement follows the renewal of a shelf to sell secondary shares of Santander Brasil. Santander could sell up to 8.2% of the Brazilian unit in a transaction that would fetch north of $2bn, though it has yet to specify any offering plans. ECM bankers away from Santander who have worked on previous transactions for the bank say the Brazil selldown could come in several small pieces – as the bank has been doing – or through a sizable marketed follow-on such as Santander Chile’s. However, such a deal would be unlikely due to poor overall market conditions an
Posted inDaily Brief
Brazilian Railroad Sets Capital Raise
Transnordestina Logistica, a Brazilian cargo operator in Brazil’s northeast, plans to raise BRL204m ($112m) through a private rights offering. It has set a price of BRL0.64 each for the 318m new shares. Existing holders may exercise their rights through December 21.
Posted inDaily Brief
BTG Plans BRL3bn Infrastructure Fund
BTG Pactual is seeking BRL3bn ($1.66bn) for a private equity fund focused on infrastructure investment. The fund will make investments in companies in the infrastructure sector. The 10-year fund includes a 5-year investment period, and is expected to open in December for a 6-month period.
Posted inDaily Brief
LatAm Equity Flows Stay Positive
While EM equity funds saw some $182m in outflows during the week ending November 16, LatAm equity funds kept their heads above water with $15m in inflows, according to EPFR. This marked the third straight week of fresh money and the longest inflow streak in over year, according to the fund tracking company. LatAm equity funds also outperformed their class during the week ending November 17, falling 1.56% against 1.67% and 1.89% drops for EM equity funds and world funds overall.
Posted inDaily Brief
Contour Launches Colombia IPO
ContourGlobal LatAm has launched a COP273bn ($143m) IPO, the first such transaction from an issuer in one of the region’s large markets since July. The power generator with assets in Colombia and Brazil is offering 27.6m shares, or about 28% of itself, at COP9,900 each, in a sale period open through December 5. The issuer, part of US-based ContourGlobal, is raising funds to develop projects. The company’s main operating assets include a stake in the Termopaipa and Termoemcali power plants in Colombia, as well as a wind farm and two hydroelectric projects in Brazil. Bancolombia and Corredores Asociados are managing the sale.