BTG Pactual plans to hold a tag-along offer for outstanding shares of Banco Panamericano September 16, to complete the takeover of the troubled lender. The bank bought Silvio Santos’ stake in troubled mid-tier Brazilian lender Panamericano in January for BRL450m, and BTG Pactual is now offering minority investors BRL4.89 per share for the 63m shares outstanding, meaning a BRL309m spend if 100% accept. This is the same price it paid Santos, and represents a 56.05% stake in the bank, or essentially the portion that is not owned by BTG or Caixapar, the investment arm of state-owned bank Caixa Economica Federal. Panamericano shares closed Wednesday at BRL5.68. BTG bought Silvio Santos’ 37.94% stake in Panamericano in January after the lender was bailed out after accounting discrepancies were found on its books.
Category: Equity
Perenco Cancels IPO Shelf
Brazil’s Perenco e Gas do Brasil Participacoes officially has revoked its IPO registration after pulling a planned deal in July. The Brazilian unit of UK-based oil exploration company Perenco, which cited market conditions for the decision not to move forward, had planned to sell 0.4m primary shares at BRL1,550-BRL2,000, meaning a deal of perhaps BRL830m ($530m). Perenco, which operates in 16 countries worldwide, had planned to use the funds to develop its 5 blocks in the Espirito Santo Basin and acquire additional blocks. About a third of the raise was slated for acquisitions, including new government auctions. BTG, Itau and Morgan Stanley were leads. The deal was among several Brazilian sales pulled in June and July as equity markets tanked. The new issuance pipeline has been slow to rebuild, with no new launches and only travel company CVC filing for a transaction.
Davivienda’s Sights on Foreign Stock, Bond
Colombia’s Banco Davivienda plans to raise up to $350m in subordinated bonds overseas, and also continues to work on plans for a foreign stock listing. The mortgage lender, which has designs on expanding into Peru, Chile, and Central America, would be taking advantage of low rates in what would be a debut international issue. The sale would not come for at least a few months and possibly not until next year, with the process of choosing banks not yet started, says an official at the bank. A 7-year tenor is being considered, with subordinated bonds best fitting the bank’s capital needs, he says. Davivienda also reiterated it plans on an eventual ADR listing. There are no details regarding the timing of this process, though it is also thought to be a 2012 event, and may or may not involve the sale of new shares. The lender had indicated in the past it wished to sell bonds and shares abroad, but plans were put on hold during the 2008 credit crisis. Davivienda raised $228m equivalent in a domestic market IPO last year, and is a frequent issuer in the local bond market. The bank is expected to have a COP300bn-COP500bn bond sale within the next month, after postponing it last week.
Citi Names Brazil Originations Head
Citi banker Mariano Gaut has been named head of Brazil capital markets origination at the US bank. The move comes as Citi tries to make its mark in the region’s largest economy after recently hiring Andre Kok as managing director and head of global banking for Brazil. Gaut comes from Citi in the US where he was head of the bank’s equity-linked business. He will move to Sao Paulo in his new role and will work alongside the Brazil global bank team led by Kok. Gaut will report to John Chirico and Richard Zogheb, co-heads of CMO. Meanwhile, in New York, Chris Gilfond and Mario Espinosa will continue to co-head LatAm DCM, while Richard Blackett and Juan Carlos George will do the same for LatAm ECM. Both New York teams will continue to direct strategy across LatAm, including Brazil.
Itau Builds Equity Team
Khalil Adam has become the latest person to join Itau’s equity team as the Brazilian bank continues to expand its footprint across LatAm. Adam comes to Itau from Santander and will be part of a four person equity sales team in New York. He replaces Marcelo Spinelli who recently left Itau to go to BTG Pactual, and will start work on August 29 after finishing gardening leave. The Brazilian bank brought in Ricardo Cavanagh earlier this year in Argentina where he is mandated to build up the bank’s Southern Cone efforts. Cavanagh reports to Carlos Constantini , global head of research, who in turn reports to Chris Egan, head of equity and exchange-traded derivatives. Barbara Angerstein has also been brought on-board from local Chilean shop Celfin and will head Itau’s equity efforts in that country. The bank is now looking to hire equity experts in Peru and Colombia as well.
BNDES Ups JBS Stake
Brazil’s BNDES has completed a BRL3.48bn ($2.18bn) transaction to turn JBS bonds into equity, upping the development bank’s stake to 30% from 17%. The bank’s BNDESPar arm bought the bonds in 2009 and indicated in May it would convert them. The deal does not alter the controlling structure of the company, JBS says.
Nutresa Seeks Further Acquisitions
Colombian food company Nutresa is now fully capitalized for this year after its recent COP522.5bn ($299m) equity follow-on, but could come to the markets again once it finds other acquisition targets, the company’s CFO Ana Maria Giraldo tells LatinFinance. Giraldo points out that with a net-debt-to-Ebitda ratio of just 1x, Nutresa’s leverage is still low. “We have low debt levels and this allows us to look at acquisitions,” she says. The company is looking to spend anywhere between $500m-$600m on its next target and the recent share issue has helped prepare the ground for any potential purchases. Target countries and regions are Peru, Central America, the Caribbean and the US, and Nutresa is now focusing its efforts on the cold cut sector after having bought US biscuit maker Lil’ Dutch Maid in 2010 and ice-cream company Helados Bon in the Dominican Republic this year. Depending on the size of the acquisition, the company may try its luck with a level 3 ADR, Giraldo says. Though Giraldo doesn’t discount international bond issues, she says there are more cost effective sources in the local markets and through bi-lateral loans with domestic banks which are still liquid. “Banks are offering very competitive financing,” she adds. Raising capital in other LatAm bond markets is also a possibility. Indeed, Nutresa was one of the first companies to tap this type of funding source when in 2009 it placed $40m equivalent of 10-year notes among Peruvian institutional investors, paying Libor+1.80%. It also raised local financing in Costa Rica after buying Galletas Pozuelo in 2006, and took out an $85m bi-lateral loan with US boutique Stephens when it acquired Lil’ Dutch Maid.
Corporates Rev Up Share Buybacks as Markets Sag
Brazilian airline Gol and developer Cyrela have become the latest Brazilian companies to take advantage of the recent slide in equity prices and announce share repurchases Gol is looking at a 1-year plan to buy up to 10% of its outstanding shares, while Cyrela also expressed its intention to repurchase shares. Gol’s shares closed Friday at BRL10.18, and are down 59.1% on the year against an 18.4% drop in the Bovespa over the same period. Cyrela’s stock closed at BRL13.83 and is off 35.4% this year. Also filing plans this week are Direcional Engenheria, which is looking at a 5.6% repurchase, Telefonica’s Telesp, which wants to buy up to 10%and developer MRV, which is eyeing a purchase of up to 3.2% of its outstanding shares.
Investors Continue to Bolt from EM Equities
LatAm equity funds saw $692m in net outflows for the week ending August 10, according to fund data firm EPFR Global, as investors continued to flee risk assets against a backdrop of losses in markets around the globe. EM equity funds, meanwhile, saw $7.7bn leave the asset class for the week. Mexico equity funds lost $95m, and Brazil saw $109m in outflows. EM equity funds fell 5.1% for the week ending August 11, and are down 12.4% ytd, according to Lipper. LatAm funds also plunged 2.2% for the week, for a 16.9% decline ytd.
EEB Advances FO
Empresa de Energia de Bogota has approved plans for an equity follow-on of up to COP1trn ($551m). The timing and exact size remain to be determined, and given the difficulty issuers are having across the region, it is not expected to launch soon. Corredores Associados is advising the utility, according to a person with knowledge of the matter, and is expected to be a lead manager along with other banks. EEB plans to use the proceeds from the offering to fund its expansion plans. Shares closed Wednesday at COP1,435.