Tres Marias was expected to price late Tuesday the third IPO in 2 years from Mexico, which saw a 3.4% drop in the bolsa amid global equity weakness. The developer was seen pricing around 1030 EST up to 32m shares at MXP30.00-MXP34.32 with the intention of reaching a MXP1bn deal size. Like many smaller Mexican companies seeking growth capital, Tres Marias sought last year to raise funds through a CCD transaction, but decided to go the IPO route after regulatory changes allowed the liquid Afore pension funds to invest in IPOs. The issuer had originally hoped to issue in May and tried again earlier this month. The process had been delayed due to market conditions, but also by the Bolsa’s work on creating a subgroup of small- and mid-cap stocks with looser initial restrictions in areas such as corporate governance than are in place for larger issuers. The issuer is developing a “city within a city” mixed-use project in Michoacan state. Ixe managed the IPO. Grower Proteak hopes to follow today also with an approximately MXP1bn IPO, through Bulltick Capital.
Category: Equity
Renova Returns With Shrunken IPO
Brazil’s Renova Energia has refiled its IPO that was postponed in March, though it is targeting just two-fifths of the original size. The renewable power generation specialist re-launched bookbuilding Friday with the aim of selling 10m units at BRL15.00-BRL17.00 each. This compares to 27.5m units at BRL19.00-BRL25.00 that it sought earlier in the year. Pricing is scheduled for July 8. An additional 3.5m units may be offered via greenshoe and hot issue, bringing the maximum possible value of the deal to BRL229.5m. Renova pulled the earlier attempt amid market volatility and investor pickiness in the wake of other high-profile shortfalls in Brazil’s equity market including OSX. Santander and Bank of America Merrill Lynch are managing the deal.
Tres Marias Reloads Mexico IPO
Mexican developer Tres Marias is planning to price its IPO June 29, according to a banker on the deal. The issuer had originally hoped to issue in May and tried again earlier this month. The process has been delayed – as have nearly all equity offerings in the region – due to market conditions. It has also been held up by the Bolsa’s work on creating a subgroup of mid-market stocks to include smaller companies with less liquidity than others trading. Tres Marias hopes to sell up to 33.2m shares at MXP30-MXP34.32 each, according to the banker, with an aim to reach a total deal size of MXP1bn. The issuer is developing a “city within a city” mixed-use project in Michoacan state. Ixe is managing the share sale. If it happens as scheduled, the deal would come one day before grower Proteak, which is also aiming to raise around MXP1bn via an IPO scheduled for June 30. The transactions would be the third and fourth IPOs this year in Mexico. Last year saw none and Mexico has seen relatively little over the past few years, especially when compared to the flood from Brazil.
Proteak Resets IPO
Mexico’s Proteak is looking to price its IPO June 30, according to regulatory documents. The teak wood grower is aiming to raise as much as MXP1.13bn through the sale, for which it had indicated a price range of MXP11.58-MXP12.75. Proteak plans to sell up to 88.7m primary shares, including an 11.6m unit overallotment in the deal, shooting to be only Mexico’s third IPO in almost 2 years. Bulltick is managing the sale, with proceeds for acquisitions and organic growth. The deal was put on hold late May until market conditions improved.
Brazil Equity Issuers Await Jumbos and Calm
Brazilian generator Multiner still plans to IPO, bankers on the deal say, waiting along with other issuers for a reduction in volatility and for the large issuance of Banco do Brasil and Petrobras. The Rio-based Brazilian power generator, which posted a BRL46.65m loss in 2009, according to regulatory filings, had BRL2.22bn in shareholder capital at the end of 2009. BTG and Morgan Stanley are managing the sale. Multiner has funded itself in the bank and bond markets in the past, and is in the process of raising BRL250m in 4-year local bonds. Food producer M. Dias Branco, developer WTorre, auto parts maker Autometal, shipper Norskan and fellow energy companies Venti, Renova and are also awaiting a better scenario to raise offers expected at under BRL1bn.
BNDES Heard Eating Jumbo Marfrig Convert
Marfrig will hold a meeting June 30 to ask shareholders to approve a BRL2.5bn convertible debenture issue to pay for US-based Keystone Foods. Itau equity analyst Juliana Rozenbaum says the buyer of the notes will most likely be development bank BNDES, but neither party confirms this. The bonds, offered privately to existing investors, are mandatorily convertible into equity after 5 years and would pay interest at the DI rate plus 1%, Marfrig says. The proposed conversion price will be BRL21.50 adjusted by CDI+1%, and for dividends and other payments. If the adjusted price is greater than market, the conversion price reverts to the market price, with a floor of BRL24.50. Additionally, Marfrig’s board has authorized the company to set up and ADR program in the US OTC market to expand access to investors, particularly those living outside of Brazil, and to increase the liquidity of its shares. Each ADR will be equivalent to one common share. The ADR program will not entail the issuance of new shares, the Brazilian meat producer says. Deutsche Bank will act as depositary and Itau Unibanco will be custodian.
Tahoe Closes IPO for Guatemala Buy
Canadian miner Tahoe Resources, which acquired Goldcorp’s Escobal silver project in Guatemala, has raised CAD348m from an IPO of 58m common shares priced at CAD6 each. The company expected to raise about CAD340m to fund the mine purchase. The company also says it has granted an over-allotment option to the underwriters of the deal to buy up to an additional 5.8m shares at CAD6 each. The option is exercisable for 30 days. GMP Securities and Genuity Capital Markets were co-lead underwriters, with BMO, CIBC, Macquarie, RBC, Dundee Securities and Paradigm Capital as underwriters. On the same day, Tahoe also closed on the acquisition of Escobal from Goldcorp. Goldcorp received an aggregate of 43.7m Tahoe common shares, representing 40% of Tahoe’s issued and outstanding common shares and $253m in cash, valuing the deal at CAD505m. Canaccord Genuity acted as the target’s financial advisor. Tahoe’s stock, trading on the TSX under the symbol THO, closed at CAD6.25 Tuesday.
Tres Marias Waits on IPO
Pricing of a MXP1bn IPO of Mexican developer Tres Marias has been moved to June 10 from June 3, says a banker familiar with the trade. He says one of the reasons why the IPO had to be moved again is because the local exchange is still working on creating a subgroup of mid-market stocks to include smaller companies with less liquidity than others trading on the Bolsa. The IPO was originally scheduled to happen May 26. Tres Marias hopes to sell up to 29.1m shares at MXP34.32 each. The issuer is developing a “city within a city” mixed-use project in Michoacan state. Ixe is managing the sale.
Oil Services Seen Fuelling BRL Equity
Oil services providers should headline the next wave of Brazilian IPOs, say investors. With Petrobras and others set to spend billions on Brazil’s recent oil discoveries, companies in that field would list, once market volatility subsides, and buyers and issuers can get closer to agreement on pricing than earlier this year. “Some Brazilian companies are now becoming large enough to become interesting for stock market listings,” says Emilio Cattaneo, managing partner at CFS Partners, an advisory firm specializing in cross-border M&A. There is demand for equipment and consultancy, he says, and notes that renewable energy could also be a source of new IPOs. “The next round of IPOs in Brazil, you will see more related to the Petrobras food chain,” Chris Palmer, equity portfolio manager at Gartmore, tells LatinFinance. Cattaneo spoke at the LatinFinance Latin America Europe Investors Forum this week in London.
Ferrous Yanks London IPO
Brazilian miner Ferrous Resources says it has pulled a $300m-$400m London IPO owing to unfavorable market conditions. “We have taken the difficult decision to postpone the initial public offering as a result of the considerable volatility in the equity markets,” says Gordon Toll, executive chairman of Ferrous. He adds that the company still has around $500m in cash and will re-evaluate options when market conditions improve. Ferrous should be able to come back to market in around 6 months, says Liberum Capital in a research note, adding that the company does not need additional funds until H2 2011. The Minas Gerais-based iron ore miner had expected to list by the end of June and eventually reach a 25% float. The company claimed the IPO would have been the first by a Brazilian on London’s big board and that it could be a candidate for inclusion in the FTSE 250. JPMorgan Cazenove, Deutsche Bank and Morgan Stanley were managing the transaction. Ferrous tried to list in September 2008, but had to delay launch due to the global crisis. The miner was founded in 2007. It has 4 projects in Minas Gerais’ Iron Quadrangle and 1 in Bahia.