BanRegio is scheduled to price its IPO today, aiming to raise close to $200m equivalent in Mexico’s second Bolsa debut this year. The Mexican bank, which focuses on lending to small and medium-sized businesses, plans to price 56.7m shares at MXP31.50-MXP40.00 each. This would mean a MXP2.33bn ($201m) transaction if done at the MXP35.75 midpoint and a 15% greenshoe is exercised. The base deal includes a secondary sale of 18.9m shares from controlling shareholders. “It has a strong asset base and operates in a market niche that’s growing very much,” says a Mexican investor looking at the deal. The transaction represents a 19.6% stake in BanRegio, which is raising funds to expand its operations in terms of size and geography. The bank plans to enter 8 more Mexican states, mainly in the center and south of the country. Banamex and BBVA Bancomer are managing the deal, half of which is expected to be sold to retail investors in Mexico and half to Mexican and international institutions. BanRegio had MXP53.5bn in total assets at year-end 2010, up 12.3% from 2009. Corporate loans constitute 80% of its MXP24bn loan portfolio, with a stated focus on small and medium-sized businesses. Founded in Monterrey in 1949 by Manuel Santos Gonzalez as Banco Regional del Norte, the lender is present in 13 Mexican states in the north and center of the country.
Category: Equity
Minerva, Launches Converts, Plans Warrant Tender
Brazilian meatpacker Minerva plans to sell its BRL300m ($190m) 2015 convertible debentures at between 97.00 and 103.00 of face value on July 26 and will tender for outstanding stock warrants thereafter. The deal is being called the Brazilian market’s first-ever public sale of mandatorily-convertible debentures, The issuer elected to price the bonds at the premium or discount, as regulators only wanted investors bidding on one value during the sale process, according to a company official. The issuer had originally planned to negotiate the interest rate, now set at 100% of DI, as well as the minimum and maximum conversion prices, now set at BRL6.00 and BRL8.00, respectively. Shares closed at BRL5.24 Wednesday. Proceeds from the sale are marked for repaying existing debt, and for working capital. Minerva is rated BBB minus on a national scale. Goldman Sachs, Deutsche Bank and Banco do Brasil are leads. Separately, following the convertible bond sale Minerva says it plans to launch a tender for some BRL150m notional value in stock warrants issued as part of a 2009 capital raise.
Repsol Sells YPF Block
Repsol has raised ARP351.3m ($86m) through a block sale of YPF shares in Argentina’s domestic market. The Spanish parent sold 1.99m shares in the Argentine oil and gas company at ARP177 each, representing a 7.8% discount to the previous ARP192 closing price. Shares closed at ARP183.00 Tuesday. BBVA Banco Frances and Raymond James Argentina managed the sale. The deal tacks on another 0.5% of YPF to the portion Repsol has been selling as part of a long-term plan to reduce its stake while keeping a majority. In May, Grupo Petersen agreed to exercise an option to buy 10% of YPF from Repsol for $1.3bn. That deal was the most recent in a string of transactions, including the $1.23bn secondary sale of YPF ADS in March that reduced Repsol’s position in YPF to about 58%.
Uruguay Farmland Play Launches IPO
Uruguay’s Union Agriculture Group has launched its US IPO, targeting more than $200m in a pricing expected July 26. Union, which acquires underutilized farmland in Uruguay and develops it for resale, plans to sell 14.3m shares at $13-$15, meaning a $230m sale if done at the midpoint and a 15% greenshoe is included. Union has set a cap of $287.5m on the size of the transaction. Proceeds are marked for land acquisitions, and possibly for debt repayment and working capital. Credit Suisse and JPMorgan are leads on the deal, which would result in a 31% free float if the greenshoe is exercised. Since its founding in 2008, Union has raised funds though private placements totaling $353.3m, and has acquired 84,670 hectares in Uruguay with an estimated worth of $270m. The company is trying its luck in what has been a tricky year for IPOs, particularly for agricultural companies. AdecoAgro, a similar play with assets in Brazil, Uruguay and Argentina, raised $314m in a January IPO, but only after resetting its range. Developer BrasilAgro pulled a planned follow-on in May. The last Uruguayan IPO was NZ Farming Systems’ $82m New Zealand-listed deal in 2006, according to Dealogic.
LatAm Equity Sees Slight Outflows
LatAm equity funds saw $6m in outflows for the week ending July 6, according to EPFR Global. EM equity funds, meanwhile, had $1.36bn in inflows for the week. For EM, this marks the first back-to-back weekly inflows since early May as retail investors committed fresh money for the first time in five weeks. Performance was also positive with EM funds climbing 1.93% for the week ending July 7 and 1.53% ytd, according to Lipper. LatAm funds also rose by 0.46% for the week, but continue to remain negative by 1.87% ytd. Global small and mid-cap funds also jumped 2.11% for the week, and are up 6.19% ytd.
Chile Continues Water Utility Selldown
Chile’s Corporacion de Fomento de la Produccion (Corfo) has begun investor presentations for the July 15 follow-on sale of shares in water utilities Essbio and Essval, which could raise around $1bn equivalent. Following its $979m sale last month of nearly all of its stake in water utility Aguas Andinas, the government entity is now looking to offload 24.4% of Esval and 38.4% of Essbio, as the Chilean government proceeds with an asset sale plan to help with earthquake recovery-related budgetary needs. The plan, according to a road show presentation, is to offer 10.2bn class A and C Essbio shares, which would raise about CLP264.3bn ($573m) based on Thursday’s closing prices. It also plans to sell 3.62bn Esval class A and C shares, which would raise about CLP361.9bn ($780m) at Thursday’s closing prices. However, each of the share classes are rather illiquid, with Essbio having a 5.4% free float and Esval less than 1%, making size estimations tricky. The auction and the price announcement are both expected July 15. Corfo is set to keep a 5.0% position in each company, both of which are controlled by the Ontario Teachers’ Pension Plan. Banchile, Bank of America Merrill Lynch and IM Trust are managing, the same trio that handled Aguas Andinas.
Banregio Heads for Bolsa
BanRegio has launched its IPO, targeting a more than MXP2bn ($172m) size. The Mexican bank, which focuses on lending to small and medium-sized businesses, plans to price July 14 the sale of 56.7m shares at MXP31.50-MXP40.00 each. This would mean a MXP2.33bn transaction if done at the MXP35.75 midpoint and a 15% greenshoe is exercised. The base deal includes a second sale of 18.9m share from controlling shareholders. The transaction represents a 19.6% stake in BanRegio, which is raising funds to expand its operations. Banamex and BBVA Bancomer are leads. BanRegio had MXP53.5bn in total assets at year-end 2010, up 12.3% from 2009. Corporate loans constitute 80% of its MXP24bn loan portfolio, with a stated focus on small and medium-sized businesses. Founded in Monterrey in 1949 by Manuel Santos Gonzalez as Banco Regional del Norte, the lender is present in 13 Mexican states in the north and center of the country. The deal would be the third IPO in Mexico this year, after Aeromexico (MXP3.89bn) and Cruz Blanca (MXP743m).
Well-bid EDB FO Tops $500m
Energias do Brasil (EDB) has priced a BRL810.7m ($506m) follow-on equity sale, selling the secondary shares at just a 0.05% discount after generating some BRL3.2bn in demand. The 21.9m shares priced at BRL37.00 each versus a BRL37.21 closing price Thursday. The share total includes a 10% greenshoe. The stock rose 1.7% in Thursday’s session, despite a drop in the Bovespa and most other electricity stocks. EDB had seen a decline in its stock of almost 9% from announcement through to Wednesday’s close, but a rebound Thursday seemed to suggest a strong bid. Parent Energias de Portugal (EDP) is the selling shareholder, holding the sale as a part of a plan to raise EUR500m from assets sales this year as it looks to keep its debt levels under control. The Portuguese utility EDP reduces its 49.1% stake in EDB to 35.3%, with the free float increasing to 48.8% from 35.0%, according to data in the prospectus. Analysts have said the position in EDB was among the easiest for EDP to sell among its global assets. EDB operates hydroelectric and wind generation assets, as well as distribution companies. Banco Espirito Santo, Itau, Morgan Stanley and Santander managed the sale. Pricing was moved back from last week, a sensible move given how recent equity deals have struggled. The next Brazilian deals on the calendar are IPOs from Copersucar July 19 and Abril Educacao July 21.
Abril Launches Educacao Spinoff
Private education company Abril Educacao has launched its IPO, targeting more than BRL500m ($319m) when it prices July 21. The Brazilian publisher and operator of schools plans to sell 18.6m units at BRL21.75-BRL26.75 each, indicating a BRL518m size at the BRL24.25 midpoint and including a 15% greenshoe. A 20% hot issue is also available. Both the greenshoe and the hot issue would consist of secondary units to be sold by members of the controlling Civita family and private equity funds managed by BR Investimentos and Banif. A unit consists of one ordinary share and two preferred shares. Abril Educacao, part of the media conglomerate Grupo Abril, plans to use 63% of the proceeds for acquisitions, 27% for paying off debt, and 10% for opening new schools and improving old ones. Abril says it would be the first listed education company in Brazil with a focus on basic and pre-college education. Listed education specialists Kroton, Anhanguera and Estacio have all tapped the equity markets recently to fuel rapid growth in one of the country’s hottest sectors, but they have more of a focus on the college and continuing education levels. Abril also specializes in book publishing, technical education, preparation for public sector exams, and plans to enter the fields of language education and distance learning. It booked Ebitda of BRL102.5m ($64.5m) in 2010, up from BRL85.8m ($54.0m) in 2009, according to its prospectus. Bradesco, Credit Suisse, Itau and JPMorgan are managing the transaction.
EDB Preps Selldown
Energias do Brasil plans to hold a follow-on equity sale today, which would raise BRL801m ($501m) at Wednesday’s closing price. The 19.9m all-secondary sale represents parent Energias de Portugal’s move to reduce its stake in the Brazilian distributor and generator under a plan to raise EUR500m this year through asset sales, as it tries to keep debt levels under control. EDB shares closed at BRL36.60 Wednesday, dropping 1.82%, and have lost 8.8% since the announcement of the deal May 16. “This is a good moment to sell in the sense that Brazil is very popular and expected to grow,” says a Europe-based analyst covering EDP. “However, everyone knows they need to get cash and they are in a hurry, and this may be putting pressure on the selling price.” The Portuguese utility EDP will reduce its 49.1% stake in EDB to 35.3% if the sale includes a 10% greenshoe, with the free float increasing to 48.8% from 35.0%. Banco Espirito Santo, Itau, Morgan Stanley and Santander are leads. EDB operates hydroelectric and wind generation assets, as well as distribution companies.