Chilean health-care provide Cruz Blanca has priced a CLP111.0bn ($234m) IPO below its floor price, raising less than the $250m anticipated by the market. The 122m primary and 100m secondary share sale priced at CLP500 each, with the issuer opting to come below the CLP525 minimum floor that it had set earlier. Analysts had recommended buying at up to CLP550-CLP600, well above the CLP497.81 closing price on the first day of trading. Total demand came in at CLP444.9bn from 1,348 orders. Retail accounted for 14% of demand, 4.5% went to employees and others linked to Cruz Blanca, with the remainder going to Chilean and international non-retail investors. The sale adds diversity to Chile’s health sector, seen as a play on growth and rising incomes, with spending in the sector expected to double in the next 10 years. Sixty five percent of the proceeds are slated for investments as the company looks to grow through acquisitions and organically. It 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% will go to repay debt. Bice, Celfin and IMTrust managed 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. Cruz Blanca claims 20% of the market in Chile, covering 530,000 people.
Category: Equity
EDP Changes Timing for EDB Selldown
EDP – Energias do Brasil has moved the date of its planned follow-on to July 7 from June 29. The Brazilian electricity company refiled its prospectus with the local stock exchange and expects to raise around BRL750m ($471m) based on the stock’s closing price of BRL37.59 on June 15. The bookbuilding process will begin July 4 and end July 6, for the sale of 19.9m shares. A 10% greenshoe is also possible. The Portuguese utility EDP would reduce its 49.1% stake in EDB to 35.3% if the sale includes the 10% overallotment, with the free float increasing to 48.8% from 35.0%. Espirito Santo, Itau, Morgan Stanley and Santander are leads. EDP said in March that it aims to raise EUR500m though asset sales this year.
Cruz Blanca Set for IPO
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.
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 IPO Prices at Low End
Brazil Pharma has priced a BRL465.75m ($293m) IPO, as investors were heard coming in for 4x demand. The retail pharmaceutical operation run by BTG Pactual sold 27m primary shares at BRL17.25 each, within the lower third of the BRL16.25-BRL19.25 range. The total includes a 15% greenshoe and a 20% hot issue. Early interest in the deal was heard coming from local buysiders who know BTG’s private equity business and BR Pharma’s chains, with foreign investors coming in later to eventually account for 60% of the deal. “It’s raising funds for consolidation of the sector, and Brazil Pharma is a good vehicle for more acquisitions,” says a participating Sao Paulo investor. 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% will 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 managed the sale, which kicks off a brisk schedule of new Brazilian deals. 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.
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.