Brazilian wireless operator TIM is scheduled to price today an equity follow-on that could reach BRL1.97bn ($1.04bn) in size, and would be the first Brazilian equity deal since July. The telecom plans to sell 219m shares, including a 15% greenshoe. With parent Telecom Italia exercising its rights to 66.94% of the sale, relatively little will hit the market, and investors and bankers away from the deal don’t expect much haggling over price. Shares closed Monday at BRL9.00, almost flat to the BRL9.04 close just before launch. The wireless operator is looking for funds to expand its infrastructure, being low on cash following the July BRL1.6bn purchase of broadband provider AES Atimus. Itau and Morgan Stanley are managing the sale.
Category: Equity
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EEB Sets FO Terms
Empresa de Energia de Bogota is looking to raise COP700bn ($364m) through an equity follow-on, with plans to sell 538.5m shares at COP1,300 each. The Colombian utility has not yet indicated when it will begin the sale period, as it is still awaiting final regulatory approval. The per share price represents a 7.14% discount to Friday’s COP1,400 close, and comes at a 10.65% discount to the COP1,455 level that EEB says is the average price over the last 3 months. EEB plans to use the proceeds from the offering to fund its expansion plans. Corredores Asociados is lead manager.
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Investors Continue to Exit Equity Funds
EM Equity funds had outflows of $2.63bn in the week to September 28, while LatAm Equity funds saw outflows of $332m, according to EPFR. LatAm funds gained 3.22% during the week ending September 29, according to Lipper. However, they are still 25.10% underwater for the year. EM funds gained 1.68% in the week, for a 21.49% loss ytd. Global small and mid-cap funds by comparison gained 1.50%, and have lost 15.53% ytd.
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Exito Shows Colombian Equity Insulation
Colombia’s Grupo Exito got 1.7x demand for its COP2.502trn ($1.40bn) equity follow-on, in a sale that points to Colombia’s relative insulation against the volatility in the broader equity markets. The blue-chip retailer closed its sale period Friday and announced allocations Tuesday, having given the COP21,900 per-share price for the 114.27m shares at launch 3 weeks ago. That the price represented an 8% discount to the COP23,800 average price over the one-month period preceding launch helped Exito avoid the fate of state-controlled oil company Ecopetrol, which opened its own follow-on sale period in July only to see markets tumble and demand fall just short of the target. Shares closed at COP22,800 Tuesday. “Exito is a big company in a country with strong economic growth,” says a banker on the transaction. It is these types of companies that have allowed Colombian equity markets to keep bubbling over at a time when other LatAm activity has ground to a halt. Colombian issuers that have raised equity in the last few months represent leaders in their sectors such as Nutresa, Ecopetrol and Exito. This stands in contrast to the Brazilian pipeline, which contains companies that are further down the quality scale and less likely to interest investors in times of volatility, say bankers on the Exito deal. Meanwhile, Brazil’s TIM Particiapcoes is set to price a BRL1.85bn ($1.01bn), follow-on next week, marking what would be the first deal from hat country since July .But with parent Telecom Italia set to exercise its subscription rights, less than BRL610m worth of shares should hit the market. “It’s going to be very difficult to see many new deals in Brazil before the end of the year,” says a New York ECM banker. Mexico and Chile also have names in the pipeline, but none appear to be close to launching. Credit Suisse, Citi, JPMorgan, and Santander managed the international part of the Exito sale, with Corredores Asociados leading the domestic portion. Proceeds will help fund
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SK Looks for Equity Raise
Chilean conglomerate Sigdo Koppers (SK) plans to raise $370m via an equity rights offering. Timing has not been determined as shareholders must still approve the offering. The move comes after SK paid EUR550m ($790m) for Belgian portfolio company Magotteaux. That purchase was initially funded with an 18-month bridge loan from advisor BNP. The group has been shedding non-core assets in order to be more acquisitive in the mining sector. SK shares closed at CLP752 Tuesday.
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Italians Consider Chilean Toll Road IPO
Italian infrastructure investment firm Atlantia has been holding meetings with Chilean investors regarding the potential IPO of toll road assets, according to market participants. The discussions are said to be preliminary at this point, especially given overall volatile market conditions, but the company is interested in floating part of its toll road package – though which roads would be involved is unclear. Credit Suisse, Goldman Sachs, Santander and UBS are said to be managing the process. Atlantia directly or indirectly owns 50% or greater stakes in 8 Chilean concessions and 1 Brazilian concession, according to its website. Earlier this year it paid $639m equivalent for stakes in 3 Chilean roads from Spain’s Acciona.
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OHL Mexico in Equity Swap
OHL Concesiones, has raised MXP1.83bn ($133.6m) through an equity swap for shares of OHL Mexico, OHL Mexico says. The 3-year swap is equal to 6.3% of its stake, and OHL has the option to buy back the shares at the end of the period. OHL concesiones owns 51% of OHL Mexico, after floating it in an IPO last year. OHL officials were unavailable for additional comment on the exact terms and identity of the counterparty.
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Enesa Pulls IPO
Brazil’s Enesa Participacoes has canceled its IPO filing, becoming the latest to do so in a long line of would-be issuers filing earlier this year. The engineer and builder planned a primary and secondary offering, though had not yet indicated a size. Banco Modal, Banco do Brasil, BTG Pactual, Credit Suisse and Itau had been hired to manage.
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Kiwi Uruguay Dairy Farmer Seeks Equity
NZ Farming Systems Uruguay, the New Zealand-registered Uruguayan dairy farmer, is planning to raise $120m via an equity rights offering. With an $85m loan from Olam, the Singapore-based agricultural firm which owns 86% of NZ, due in December, NZ says it must raise the equity or upsize the facility to $110m and extend its term. The matter will be put to a shareholder vote November 4. Olam has indicated it would exercise its rights in the sale, to be priced at $0.70 per share. Olam had offered minority holders this price in April when it sought and failed to take its ownership above the 90% threshold needed to delist NZ.
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LatAm, EM Equity Funds Continue to Leak
LatAm equity funds recorded outflows of $240m in the week ended September 21, while $1.4bn left all EM equity funds, according to EPFR Global. During the week ended September 22, LatAm funds lost 13.25%, according to Lipper data. Losses on the year total 27.07%. The same was true for EM equity funds, which lost 10.07% for the week, and are down 22.85% on the year. Global small and mid-cap funds lost 8.10% on the week and have lost 16.69% ytd.