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.
Category: Equity
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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.
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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.
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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.
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Mahle Sets Brazil Selldown Target
Brazil’s Mahle-Metal Leve has set a June 30 pricing date for a secondary offering of shares owned by German parent Mahle Industriebeteiligungen, targeting a BRL350m plus size. It plans to sell 6.56m shares, increasing the free float to as much as 30.00% from the current 12.35%. Such a deal would raise BRL366m at Wednesday’s BRL48.50 closing price if the 15% greenshoe is included. The manufacturer of parts for cars, trucks and tractors began a road show Wednesday, and is upping its public float as part of a plan to migrate to the Novo Mercado section of the Bovespa. Banco Fator, Itau and Deutsche Bank are managing the sale. The Brazilian pipeline is looking quite heavy for late June, leading off with Brazil Pharma’s IPO on June 22, Also on the agenda are IPOs from Qualicorp and Technos as well as follow-ons from BR Properties, Energias do Brasil and Kroton the following week.
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Santander Rio Looks for June Launch
Argentina’s Santander Rio would ideally like to price its sale of ADRs by the end of the month and is eyeing a size of up to $1bn, according to investors following the deal. However, no firm details on timing or size have been set thus far. Market volatility, concern about the Argentina situation ahead of the October presidential elections and the hit-or-miss nature of equity sales in the region this year all mean the deal could be pushed back, investors add. The bank is heard seeking 10-11x earnings. Bankers managing the deal decline to comment on the details of the transaction. The bank is looking to raise funds to expand its branches, for acquisitions, and to increase its loan portfolio. Bank of America Merrill Lynch, JPMorgan and Santander are managing the sale. Santander Rio preferred shares closed at ARP11.90 Thursday.
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Vapores Starts Equity Road Show
Chile’s Compania Sudamericana de Vapores (CSAV) has started investor meetings for a $500m share subscription open to existing holders. It plans to sell up to 834.7m shares at CLP285 each. If all shares are sold, this would raise a total of CLP237.89bn ($508m). The shipping company is offering holders 0.411325 shares for each existing share during a period expiring June 30. Chile’s Grupo Luksic, which brought its stake in CSAV to 20% in April, plans to subscribe all of its rights and will pick up any rights not subscribed by current holders, according to a report by bookrunner Celfin. Proceeds will be used to help Vapores to acquire cargo ships and for working capital. Shares closed at CLP291Monday, implying a 2.1% discount for the rights offering price.
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Bovespa Approaches BVC for Tie-up
The Colombian stock exchange (BVC) announced Friday that it had received interest from Brazil’s Bovespa regarding a potential integration of the two exchanges. Trading began on May 31 on the MILA, formed after Colombia, Peru and Chile merged their exchanges to become the second-largest in the region, behind the Bovespa. “The recent integration initiatives throughout the region have generated positive expectations and interest related to market development capital,” the BVC says in a statement. The stock exchange adds that BVC would be willing to consider a potential integration.
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LatAm Equity Inflows Continue
LatAm equity funds took in $26m for the week ended June 8, according to EPFR Global. EM equity funds, meanwhile, had $220m in outflows. Peru equity funds proved to be the biggest driver for LatAm funds, taking in $62m as investors saw buying opportunities following Ollanta Humala’s June 5 presidential election. Brazil equity funds also took in $41m. Performance was negative, as EM funds fell 1.07% for the week ended June 9, and are down 0.61% ytd, according to Lipper. LatAm funds were down 1.55% for the week, and remain down 3.10% ytd. Meanwhile, global small and mid-cap funds fell 1.90% for that period, but are up 2.19% ytd.
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Security Prices $200m Equity Raise
Chile’s Grupo Security has priced a CLP36.22bn ($77.5m) public follow-on, part of a CLP90.00bn ($192m) capital increase through the issuance of new shares. The financial group priced the 181.1m public shares at CLP200 each, representing a 4.3% discount to Thursday’s CLP209 close. Including the participation of existing holders, the company will issue 450m shares total. Security is raising funds for growth at its various units. The group’s main operation is Banco Security, though it also has operations in insurance, investments and asset management. IMTrust and Security’s brokerage unit managed the sale. Shares closed at CLP WHAT Friday. Chile’s equity market has been active this year, with fishery Australis Seafoods raising $71m equivalent last week, and Aguas Andinas set for a follow-on Wednesday and Cruz Blanca to IPO the following week.