WTorre has asked regulators to cancel its planned IPO on the Bovespa. The Brazilian commercial and industrial real estate developer does not state a reason, but poor performance of Brazilian IPOs earlier in 2010, threatening global market conditions during the middle of the year, and a huge Petrobras overhang have all conspired against smaller Brazilian issuers filing to go public. Bank of America Merrill Lynch, BTG Pactual, and Bradesco were managing the deal for WTorre. It did not communicate a transaction size, though WTorre’s adjusted Ebitda for 2009 of BRL191.4m does not suggest a large float. WTorre has historically funded itself through the domestic CRI securitization market. To help meet approaching debt maturities, it was preparing in July BRL90m in 2015 debentures, through Banco do Brasil. Bankers say smaller Brazil hopefuls filing earlier in the year – a group including Venti, Sonae Sierra and Autometal – may find themselves waiting behind the line of larger issuers aiming to follow Petrobras’ $70bn plus capitalization set to come Thursday.
Category: Equity
BAML Defines LatAm Fee Opportunity
LatAm is an essential part of the business for Bank of America Merrill Lynch (BAML), according to Andrea Orcel, executive chairman of global banking and markets and president of EM ex-Asia. And investment banking represents just 5% of the potential fee pool. “The emerging markets are an enormous and critical opportunity,” Orcel tells LatinFinance in an exclusive interview. “Latin America is obviously a key component of our global emerging markets strategy.” Orcel estimates a fee pool of around $70bn in LatAm and CEEMEA across banking, global markets and wealth management. About $30bn of that is anticipated from LatAm, taking into account less glamorous areas like trade and export finance, leasing, treasury services and cash management, which pay well when done in bulk. “That includes all businesses: corporate banking, sales and trading, investment banking and wealth management,” says Orcel. “According to Dealogic, the investment banking fee pool for Latin America was about $1.5bn in 2009. We had a high single digit market share of that and we believe we are on target to achieving double-digit share in the future,” he adds. Orcel says LatAm will be a significant contributor to global revenue across all products, but declines to put a number on it. “Latin American investment banking revenues have soared in the past year and are expected to be up 70% by year end, versus 2009,” says Orcel. Globally, BAML earned $3.1bn in Q2, from $29.5bn in revenue. Investment banking income was $1.3bn in the quarter, which BAML does not break out by region.
Aussie E&P Joins Brazil Oil Equity Pipeline
Karoon Gas Australia, the Australian E&P company with ownership of Brazilian and Peruvian oil exploration blocks, plans to sell 35%-30% of its LatAm assets via an IPO on Brazil’s Bovespa. It has hired Morgan Stanley to lead the sale, which would create the Karoon Petroleo e Gas unit. Karoon does not indicate timing or BRL value. Karoon expects to retain 70%-75% ownership in the Brazil assets, and also will look to raise funds privately before the IPO, it says in a statement. The issuer adds that it will use a 1-month review period following filing of a preliminary prospectus to determine whether to proceed. ASX-listed Karoon owns 5 blocks in Brazil’s Santos Basin, and 2 in Peru. It claims to have an unrisked mean estimate of 2.15bn barrels of reserves. It agreed last month to take a 20% stake in 2 Santos wells through a joint venture with Petrobras. Karoon has a market cap of AUD1.24bn ($1.15bn). It joins an equity pipeline awaiting a $25bn-$30bn Petrobras offer September 23, before other oil operators, including Repsol Brasil and HRT Participacoes, come with IPOs of their own.
Equity: Oil Blocks Pipeline
After challenging times earlier this year, Brazilian equity capital markets are bursting with issuers ready to print. At the end of August, however, the market awaited Petrobras.
Investment Bank Fees: Glass Half Full?
Investment bankers have run out of ways to describe the rich revenue potential in LatAm. Those with other products to offer are chasing a much bigger pot.
Colombia Pension Funds Get Equity Boost
Colombian pension funds are set to implement a multi-fund structure that allows savers to calibrate investment by risk appetite. The move should boost AFPs’ investment in equity.
MEXICO CCDs: Expanding Opportunity
A wave of new CCDs is making its way to the Mexican market. Size and the diversity of underlying assets are slowly increasing.
Temasek Talks Mexico Potential
As relations between Asia and LatAm strengthen, Temasek sees itself well positioned to ride Mexico’s recovery. The sovereign wealth fund is teaming up with entrepreneurs.
CSN Reported Listing Mine Unit
Steelmaker CSN will look to list shares in its mining unit following a Brazil IPO, according to wire and local press reports citing remarks from CFO Paulo Penido. The steelmaker has long indicated its intentions to spin off mining assets, which include the Casa de Pedra mine, and had initially hoped to do so in the middle of this year. ECM bankers say the deal could be among the crop of Brazil equity transactions to hit the market after an expected $30bn follow-on from Petrobras in September. The spinoff could raise as much as $3bn equivalent. Penido was also cited as saying CSN was in talks with its Japanese and Korean partners in the Namisa consortium to include those assets as well.
Tereos to List in Brazil, FO Expected
Tereos Internacional, the unit of the European-based Tereos Group formed from the combination of its Brazilian Acucar Guarani and European and Asian assets, has been approved to list shares on the Bovespa, and says it will start trading today. The company has been given a year to reach the 25% minimum float required by the Novo Mercado. “The reestablishment of the free float would mean a follow-on of roughly BRL590m, likely imposing a 19% dilution at current trading levels,” Itau says in a report, noting that the current free float stands at 10.55%. The shop notes that the size of the Brazil follow-on would also depend on the size of an expected Tereos Internacional offer in Paris. Tereos had initially planned to list in June.