Category: Equity

Adecogaro was set to have fixed the price of its US IPO by this morning, expecting to raise more than $400m. The LatAm agricultural play is selling 21.4m primary and 7.1m secondary shares at $13-$15 each. The deal would raise $400m at the midpoint, and also may add a 4.3m share greenshoe. “There are many private vehicles making a play on Latin American farmland, but few public ones, and it is a positive sign that they are starting to list,” says Pedro Richards, an equities analyst covering agricultural companies at Raymond James Argentina. He notes Adecoagro offers the combination of a play on land valuation and a play on actual farming operations. Comparable listed companies include Brazil’s SLC Agricola, more of an operational play, and Argentina’s Cresud and Brazilian BrasilAgro, which are mostly land plays at this point, he says. The lack of publicly-traded agriculture plays and high prices drives investor interest, he adds. Other than price risk, Richards explains, legislation limiting foreign farmland ownership in Brazil, which limits the potential for acquisitions. As part of the operation, shareholder Al Gharrafa Investment Co, a unit of Qatar Holding, has agreed to buy $7.4m shares at $13.44 each, as long as the total IPO raises at least $400m. The largest shareholders, George Soros’ Pampas Humedas (34.0%) and HBK Investments (25.6%), expect to see their stakes reduced to 21.4% and 16.1%, respectively. Al Gharrafa holds 6.5%, and could see its holding grow to 11.2%. Credit Suisse, Morgan Stanley and Itau are global coordinators and joint bookrunners, with Deutsche as bookrunner. The Luxembourg-based farmland venture operates in Brazil, Argentina and Uruguay and is involved in farming, energy production and land development. It plans to use proceeds to fund construction of a sugar and ethanol mill in Brazil and expanding its farming business.

Brazilian entertainment company T4F Entretenimento is preparing an IPO, according to regulatory filings. The event promoter and ticket broker operating in Brazil, Chile and Argentina has not indicated the size of the offer or use of proceeds in its initial documents. The offer will include primary and secondary shares sold by controlling shareholder and CEO Fernando Luiz Alterio, Mexican entertainment operator CIE Internacional, and Gavea Investimentos’ GIF II fund. T4F, which stands for “time for fun” booked BRL95.1m in Ebitda in 2010, up from BRL46.1m in 2009. Credit Suisse is lead coordinator of the sale, with BTG and Bradesco as bookrunners.

Codelco is set to sell its 40% stake in power company E-CL today for about $1bn, while the George Soros-backed Adecoagro is targeting $400m in a US IPO. As part of the Chilean government’s reconstruction funding efforts, Codelco is set to price about 400m shares in E-CL via auction, which would raise CLP512bn ($1.05bn) if done at Wednesday’s CLP1,280 closing price. The exact number of shares to be sold will be determined during the sale, a banker on the deal says. LarrainVial and JPMorgan are managing the sale, which follows a 3-week roadshow. Codelco co-owns E-CL with France’s GDF Suez, which holds a 52.4% stake, in addition to a 7.6% free float. Meanwhile, Adecoagro could raise more than $400m today in a US IPO. The Luxembourg-based farmland venture that operates in Brazil, Argentina and Uruguay plans to offer 21.4m primary and 7.1m secondary shares at $13-$15 each. Shareholder Al Gharrafa Investment Co, a unit of Qatar Holding, has agreed to buy $7.4m shares at $13.44 each, as long as the total IPO raises at least $400m. A 4.3m share greenshoe is also possible. Adecoagro is involved in farming, energy production and land development and counts a George Soros fund as its largest shareholder. It plans to use proceeds to fund construction of a sugar and ethanol mill in Brazil and expanding its farming business. Credit Suisse, Morgan Stanley and Itau are global coordinators and joint bookrunners, with Deutsche as bookrunner.

Avianca is heard to have picked Colombia’s Corredores Associados to manage a domestic IPO, according to local and US market sources. The airline has been widely expected to list for some time. It is said to have been considering a float in Colombia and abroad, with several international shops pitching. It has apparently decided on a domestic listing, potentially followed by an ADR or other international deal. Corredores is one of the go-to shops for domestic raises in Colombia, having done Davivienda’s COP416bn ($228m) local-only IPO last year. In a statement last week, the airline’s Avianca SA opco said it was not considering a listing, though it could not necessarily speak to the plans of the Avianca-Taca Limited holdco. An official at Corredores declines to comment. This year is shaping up to be a big one for ECM in Colombia. A long-awaited deal from Aval, via Credit Suisse and JPMorgan, and Ecopetrol, are both in the cards. Ecopetrol is set to sell a 10% stake, with finance ministry officials also having said publicly that floating more is possible to help with flood recovery costs. Relationship banks JPMorgan, Credit Suisse and Bancolombia are considered likely favorites for the mandate.

Queiroz Galvao Exploracao e Participacao, the oil E&P unit of Brazilian construction group Queiroz Galvao, has started investor meetings for an IPO. Queiroz plans to sell 69.3m primary shares at BRL23-BRL29, which would generate proceeds of BRL1.8bn if priced at the midpoint. A 15% greenshoe and 20% hot issue of secondary shares is also possible. Itau is lead coordinator on the sale, with BAML and BTG as bookrunners. The operator generated BRL225.1m in Ebitda through the first 9 months of 2010, up from BRL50.2m for the corresponding period in 2009, and BRL117.6m for the full year 2009, according to its filing. Some 70%-80% of the proceeds will go to the acquisition of new blocks, and the remainder to exploration in its existing blocks. Queiroz filed in November before opting to wait until this year after peers HRT struggled initially in the aftermarket before recovering and Karoon Gas postponed a float at the last minute.

More than 9 months after initially filing, Spanish auto parts manufacturer CIE Automotive has launched an IPO for its Autometal unit on Brazil’s stock exchange, according to regulatory documents. Autometal began meetings Wednesday and plans to price February 3. It is set to sell 31.5m shares at BRL17-BRL21, which would bring in BRL599m if done at the midpoint. A 15% greenshoe and 20% hot issue of secondary shares is also possible. Santander is lead bookrunner, along with Credit Suisse, JPMorgan and Itau as bookrunners. Autometal claims to have doubled in size from 2005-2009, and posted Ebitda of BRL234.7m in the first 9 months of 2010, up from BRL151.1m in the corresponding period in 2009, and BRL215.3m in full-year 2009.

International Meal Company, the Brazilian restaurant operator controlled by Advent International, will reattempt an IPO on the Bovespa, according to a regulatory filing. IMC had planned a BRL800m plus filing in late 2009, but withdrew and instead raised $100m privately in June 2010. It has not indicated how much it is seeking to raise this time around, but plans to sell both primary and secondary shares held by Advent’s Brasil Empreendimentos vehicle. IMC plans to begin marketing February 17 and price on March 2, and has hired BTG Pactual as lead coordinator and Credit Suisse and Santander as bookrunners. IMC is raising funds for expansion, improving existing locations, and repaying debt. The company, best known for the Frango Assado and Viena restaurant chains, operates 214 “quick casual” restaurants found in Brazilian malls, airports and rest stops, and also has operations in Mexico and the Caribbean. It posted Ebitda of BRL103m in 2010 and BRL71.8m in 2009.

Chilean food products company Agrosuper is preparing to file for an IPO, according to a banker familiar with the process. It has hired Banchile and LarrainVial to manage the transaction, for which there is no further information. Agrosuper specializes in ham, poultry and salmon, and has operations in Italy, China, Japan, Mexico and South Africa.

Avianca is not considering an IPO of its operating company in Colombia, it says, though it is keeping its options open at the Avianca-Taca combined holdco. “Avianca SA informs that, to date, it has not considered filing to list its shares on the Bolsa de Valores de Colombia. However, its shareholders through Avianca Taca Limited constantly analyze options in the capital markets,” the airline says. The company was responding to speculation about listing in the local press. With significant fundraising needs, ECM bankers say a plan is still likely in the cards. However, the company may elect to list locally this year, and subsequently add ADRs or a New York listing at a later date. Avianca and Taca merged in 2009, and have been expected by analysts to issue equity ever since.