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
Category: Equity
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.
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.
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.
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.
AMX Reaches 93% of Telemex
America Movil has reached 92.8% ownership of Telemex, according to preliminary results of its public offer to buy up the 40% it didn’t already own. About 5.9bn Telmex shares were tendered in a transaction that should cost AMX about MXP62.15bn ($4.58bn). AMX offered MXP10.50 per share, and plans to delist Telmex, as part of a reorganization effort to get all of the Mexican billionaire Carlos Slim controlled telecom assets under one roof.
Davivienda FO Demand Tops $370m
Colombia’s Banco Davivienda has seen orders reach COP716bn ($373m) in its equity follow-on, reaching close to the upper end of the COP480bn-COP800bn it is authorized to raise during the sale period ending November 10. Details on final allocations and size will be released by the end of the month. Davivienda launched the FO October 20, offering 20m-40m shares at COP20,000 each. The bank is raising funds to grow and keep up with the expansion of other Colombian FIGs. It has its eyes on operations in other countries including Peru, and an eventual ADR listing and 144a bond offering. Corredores Associados is managing.
Mixed Flows for LatAm Equity
LatAm equity funds eked out just $15m of inflows in the week ended November 9, with Brazilian funds losing $57m, according to EPFR. Still EM equity funds overall, booked a more impressive $2.08bn of inflows over the same period. Market performance for the asset class, however, was less than stellar. EM equity funds lost 2.84% during the week ending November 10, for 16.24% drop ytd, according to Lipper. Similarly, LatAm funds were down 2.62% on the week, for a ytd loss of 17.78%. Global small and mid-cap funds were down 0.35%, and have slipped 4.00% ytd.
Vale Preps Fertilizer Buy-Up
Vale’s potash producing subsidiary is preparing to spend BRL2.2bn ($1.3bn) to acquire the rest of Vale Fertilizantes it doesn’t already own. The Brazilian miner’s Mineracao Naque is offering BRL25 per ordinary or common share, representing a 1.3% premium to Thursday’s BRL24.68 preferred share closing price. Vale holds about two-thirds of Vale Fertilizantes. The offer is subject to two-thirds acceptance from minority holders. The buyback is scheduled for December 12. The operation is part of a long-term Vale strategy to diversify, and also a planned reorganization of fertilizer operations where Fertilizantes would be combined with other assets and eventually refloated through a new IPO.
Brazil Mine Clinches Bought Share Deal
Toronto-based Colossus Minerals, operator of the Serra Pelada project in Brazil, has raised CAD86m ($85m) through a equity-linked bought deal. Colossus sold 86,250 units at CAD1,000 each, which includes the underwriters’ exercise of an overallotment. Each unit consists of a CAD1,000 face value of a senior unsecured 2016 gold-linked note and 60 common share purchase warrants. The 2016 notes pay between 6% and 13%, dependent on the price of gold. Each warrant entitles the holder to acquire one common share of Colossus at a price of CAD8.50. Dundee Securities, Clarus, Canaccord Genuity and GMP managed the deal. Proceeds will help fund the Serra Pelada gold and platinum mine in the state of Para, Colossus’ sole asset, which is expected to begin commercial production in 2013.