Chile’s Cruz Blanca is set to announce pricing today on its IPO and could raise more than $250m. Market expectations are for a CLP550-CLP600 per share price for the sale of 122m in primary shares and up to 100m in secondary shares, implying a size of anywhere between CLP122.1bn-133.2bn ($258m-$281m). Local brokerage Security sees health-care spending doubling over the next 10 years and recommends buying the IPO at CLP560 with a 12-month target of CLP700. The health services provider has been marketing in LatAm, the US and UK, as it prepares to float up to 35% of the company. It follows pharmaceutical company CF Recalcine, which raised $368m equivalent last month, adding some sorely needed diversity to Chile’s equity market. Like Recalcine, Cruz Blanca is an expansion play, with 65% of proceeds slated for investments. The company is looking to grow through acquisitions and organically and has plans to open new locations for its Integramedica walk-in clinics as well as renovate its 3 brands of medical centers. The other 35% would be used to repay debt. Bice, Celfin and IMTrust are managing the sale. The issuer, owned by Grupo Said and Linzor Capital, was founded in 1999, though the Cruz Blanca brand was created in 2008 with the acquisition of health insurer Isapre ING. The health insurance operations represent 74% of Cruz Blanca’s business, according to the prospectus. Its total 2010 Ebitda was $31.2m equivalent. Cruz Blanca claims 20% of the market in Chile, covering 530,000 people, according to its website.
Category: Equity
La Polar Lowers Capital Raise
Chile’s La Polar reduced the amount of capital it will look to raise in the wake of a scandal over unauthorized lending practices that saw another 11 executives sacked this week. La Polar will now seek to raise CLP100bn ($212m), about half the $400m it was expected to authorize. It also intends to ask bondholders to waive bond payment acceleration and default covenants in a meeting June 29. La Polar and financial adviser LarrainVial are also working on a proposal to extend maturities of bank loans.
Brazil Pharma Set to Open Market
Brazil Pharma is set to price its IPO tonight and could raise more than BRL400m ($250m) in the first of several Brazilian deals expected to be sold in coming weeks. The retail pharmaceutical operation run by BTG Pactual was heard with a book already covered by Tuesday afternoon, according to an investor. It plans to sell 20m primary shares at BRL16.25-BRL19.25 each, meaning a BRL408m deal if done at the BRL17.75 midpoint and a 15% greenshoe is included. A 20% hot issue is also available. In a sector where the top 5 players have less than 25% of the market, Brazil Pharma plans to use 70% of the proceeds for acquisitions, 10% for developing new products and 7.5% for improving its services. The remaining 12.5% would be used to pay shareholders of Drogaria Rosario and Guararapes, two recently acquired drugstore chains, in performance-related and stock option payouts. Bradesco, BTG Pactual, and Morgan Stanley are managing the sale. Fellow retailers Drogaria Sao Paulo and Paguemenos are also expected to file for IPOs this year. The Brazil Pharma offer kicks off a 2-week period full of Brazilian deals, breaking an almost 2-month lull among issuers from LatAm’s largest market. Health insurance provider Qualicorp is scheduled to follow Monday with an IPO. Tuesday brings an IPO from watchmaker Technos and a follow-on from BR Properties, and Wednesday sees follow-ons from educator Kroton and Energias do Brasil. The week finishes with a follow-on from manufacturer Mahle Metal Leve Thursday and the IPO of E&P operation Perenco.
Petrominerales Acquires 5% Stake in Ocensa
Petrominerales has agreed to acquire a 5% stake in the Oleoducto Central crude oil pipeline from Total E&P, for a purchase price of $281m. The pipeline transports 560,000 bopd from the Llanos Basin to the Covenas port in Colombia. Petrominerales says it expects to transport 25,000 bopd of crude through the pipeline. The deal “helps secure shipment of future oil at an attractive price,” Petrominerales CFO Kelly Sledz tells LatinFinance. Sledz says the investment improves the company’s operating margin by $5 per barrel of oil. Petrominerales produced 40,800 barrels of oil per day in Q1, Sledz says. Petrominerales used TD Securities as its financial advisor on the deal and Godoy & Hoyos as its local legal advisors.
Suramericana Plans Capital Raise
Colombia’s Grupo Suramericana has approved the issue of up to 130m new shares but whether a public offering is on the cards remains unclear. Suramericana officials have said publicly this year that the group plans to expand its holdings in Colombia and abroad. The conglomerate owns minority positions in Colombian companies including Bancolombia, cement maker Argos and food products company Nutresa, as well as controlling stakes in insurance and social security provider Suramericana and the Proteccion AFP pension fund. It made its USD bond debut in May, with a $300m 2021 through Bank of America Merrill Lynch and JPMorgan. Its stock closed at COP38,300 Tuesday.
Ideal Shares Jump On Primary Price
Impulsora del Desarrollo y El Empleo en America Latin (Ideal) saw its stock price leap 22.8% Monday to close at MXP18.78 after it announced plans to raise MXP6.14bn through the sale of new shares at a minimum of MXP22.00 each. The Mexican infrastructure specialist controlled by billionaire Carlos Slim, had already unveiled details about the follow-on that will include both primary and secondary sales, but the minimum MXP22.00 price clearly excited the imagination of investors just as the company’s shareholders also approved the transaction which is expected to reach MXP9.20bn ($775m) in size. Aside from the primary portion, the offering will include secondary shares sold by the Carlos Slim foundation that would make up one-third of the total sale. Proceeds from the primary portion are slated for the company’s growth. A 15% greenshoe is also available, which could bring the offer to MXP10.58bn. Banamex and Inbursa are managing the sale. The timing has not yet been determined, according to a banker on the deal.
LatAm Equity Funds See Outflows
LatAm equity funds saw $90m in outflows for the week ended June 15, according to EPFR Global. EM equity funds, meanwhile, had $830m in outflows. Mexico equities saw the highest losses in the region at $73m, while Brazil equity funds bucked the trend with $47m in inflows. Performance was negative, as EM funds fell 3.14% for the week ended June 16, and are down 3.79% ytd, according to Lipper. LatAm funds are lower by 3.76% for the week, and remain down 7.08% ytd. Meanwhile, global small and mid-cap funds fell 2.76% for the week, and are negative 0.54% ytd.
Casino Increases GPA Stake
Groupe Casino, the French food retailer, increased its stake in Brazilian retailer Grupo Pao de Acucar (GPA) to 37.0% from 33.7% for around $360m. The move does not change the corporate control of the Brazilian unit. Diniz and his family own 32.7% of the ordinary and preferred shares of GPA. This comes after the company filed for arbitration against Abilio Diniz, GPA’s chairman, over reports of possible merger negotiations with Carrefour, Casino’s main competitor in France. GPA has also issued a denial on the Brazilian stock exchange that it was negotiating a merger with Carrefour. However, such a move could result in an entity with a combined 28% stake in the Brazilian market. Acucar has a market cap of around BRL16.2bn ($9.8bn). Groupe Casino stock fell 3.32% to close at EUR66.77 on the Paris stock exchange Thursday, while GPA slipped 2.324% on the NYSE to close at $41.610.
Perenco Launches Brazil IPO
Perenco Petroleo e Gas do Brasil Participacoes has launched its IPO, and plans to price the BRL750m-BRL850m ($467m-$529m) transaction July 1. The Brazilian unit of UK-based oil exploration company Perenco plans to sell 0.4m primary shares at BRL1,550-BRL2,000. This would mean a BRL829m sale if done at the BRL1,775 midpoint and a 15% greenshoe is included. A 20% hot issue is also available. Perenco, which operates in 16 countries worldwide, is seeking funds to develop its 5 blocks in the Espirito Santo Basin and acquire additional blocks, according to a prospectus. About a third of the raise will go to acquisitions, including new government auctions. Perenco has been operating in Brazil since 2007. BTG, Itau and Morgan Stanley are managing the sale. Other oil related companies are also in the pipeline or have already come to market. Quieroz Galvao E&P raised a BRL1.52bn IPO in February, and onshore operator PetroReconcavo is awaiting launch of its IPO.
Aguas Shares Dip After $1bn Sale
Aguas Andinas stock ended lower on Wednesday after Chilean government entity Corporacion de Fomento de la Produccion (Corfo) raised $979m equivalent through the sale of shares in the water utility. The transaction represented 30% of Aguas Andinas and involved the sale of 1.83bn shares at CLP250 per share, raising CLP457.5bn ($979m). The price came at a 3.8% discount to Tuesday’s CLP260 close before the company’s shares dropped to CLP248.17 Wednesday. Demand reached CLP873.5bn with 14% of the sale going to domestic retail accounts and the remainder to domestic institutional and international buyers. The government keeps a 5 % stake in Andinas, including class B shares that allow it to retain certain veto powers in major decisions going forward. Corfo had initially planned to sell all of its 35% (2.14bn shares) position, but adjusted that amount to 30% during the period leading up to the sale. Banchile, Bank of America Merrill Lynch and IM Trust led. Andinas is 50.1% owned by the Inversiones Aguas Metropolitanas (IAM) vehicle, which is in turn 56.6% owned by Spanish water utility Agbar, which is controlled 75% by France’s GDF Suez. Privatized in 1999, Andinas provides waste and water services in Chile through six subsidiaries. The government got approval late last year for the sale in order to raise funds for use at other state-owned enterprises. It follows January’s $1bn sale of 40% of utility E.CL and is part the government’s plan to meet increased financing needs through asset sales following last year’s earthquake.