Category: Equity

Argentine agricultural company Los Grobo is launching a major expansion of its business in Brazil that could result in an IPO in three years. “We want to establish a platform in Brazil. Once we develop that we would plan for a float of shares,” Alejandro Stengel, CEO of Los Grobo, tells LatinFinance. He adds that it is too early to say where his firm would list, but adds that the Bovespa is a very attractive option. To fund its Brazil push, Los Grobo has recently tapped Pactual Capital Partners (PCP), a Brazil-based asset manager run by former partners of Banco Pactual, for $100m in long term funds. The minority stake could also be accompanied by additional capital raising in short order, should the company find an attractive M&A opportunity. Los Grobo issued $20m in local Argentine bonds at the end of 2007 and could launch an additional $40m over the next several months, depending on market conditions. The company also has businesses in Paraguay and Uruguay.

Carlton Savannah, Jamaica’s first REIT raised just JMD400m ($5.6m) in its IPO, falling well short of its proposed target of $17.3m equivalent . The company sold 68m shares at JMD5.91 , plac ing them privately, pending approval for a listing on the Jamaican Stock Exchange. With proceeds, the company will buy only seven apartment units at the Carlton Savannah complex in Trinidad instead of the originally targeted 16. The company expects to pay its shareholders with rent income from the properties in Trinidad. The IPO was launched May 19 and its closing was postponed twice. The company is still in talks with some investors to discuss the possibility of raising more cash to buy the remaining apartments and a spa, says Leo William, executive director of Willinvestja.com, a broker working on the deal. Jamaica’s NCB Capital led the transaction.

Two managing directors who were central to Morgan Stanley’s LatAm ECM practice have departed, leaving a sizable gap at the shop which is trying to build up its presence in the region. Luiz Carvalho, head of LatAm ECM and Gregg Nabhan, responsible for ECM coverage of industrial companies in the Americas, left the firm for different reasons. Carvalho is understood to have left for personal reasons, while Nabhan is heard to have been given a senior role at Banc of America Securities’ ECM division. A Morgan Stanley spokeswoman declined to comment on the departures. People close to the firm, however, note Morgan Stanley may be close to announcing a new hire in Sao Paulo that will be responsible for LatAm ECM. The shop has apparently been looking to hire a new executive since Carvalho’s departure last month.

Panamanian bank holding company Bicapital Corporation, the owner of Guatemala’s Banco Industrial and Honduras’ Banpais, is planning an IPO on the Mexican stock exchange. Banco Industrial had announced plans for an IPO on the Bolsa last November but never proceeded with a launch. The issuer filed a prospectus on the Bolsa Tuesday. Bicapital will list 12m shares on the Mexican exchange – 8.5m primary shares and 3.6m secondary shares – which represents approximately 23% of its total shares. The transaction is part of a plan to eventually offer 121m shares in international markets, it says. Bicapital did not provide timing or pricing details. Credit Suisse and Banorte are leading the offering, which gives another boost to the flagging Mexican equity market.

Genomma Lab’s shares closed up at MXP16.67 on the first day of trade on the Mexican Bolsa, after pricing $200m in an IPO late Tuesday night at MXP16, the low end of a MXP16-20 target. The Mexican healthcare product producer’s shares gained about 4.2% despite an overall drop of about 1.0% in the IPC Wednesday. The offering follows the Bolsa’s own IPO last week, in which shares slid after pricing at the midpoint, and other smaller-sized LatAm offerings in Brazil this year that priced below their range. The more than 70% of the offering sold internationally was “comfortably” oversubscribed, according to a banker on the transaction, drawing interest from both EM-focused investors and health care dedicated accounts. The smaller local portion was “multiple times” oversubscribed, the banker says. Genomma expected to raise MXP2.09bn from the offer of 130.9m shares, or MXP2.41bn from 150.5m shares if the greenshoe is fully exercised. Bankers landed $9.1m in fees, according to Dealogic, representing a gross spread of 4.5%. IXE and Santander managed the Mexican portion of the sale, while UBS and Merrill Lynch ran the international books.

Mexico’s Genomma Lab was finalizing details of its IPO late last night. The maker of health care and beauty products was set to offer 150.5m shares, including a 19m-share greenshoe, at between MXP16-MXP20, expecting to raise around $300m. The offering represents about one-third of Genomma’s capital, and proceeds will be used to pay short-term debt, build a new distribution center and buy patents, brands, products and companies, according to the prospectus. The sale is the second IPO in a week in Mexico following a 7-month dry spell. In a transaction that was hoped would stimulate the market for new issuers, the Bolsa raised about $408m last week, pricing at the MXP16.50 midpoint and trading down to MXP15.51 Tuesday. Founded in 1996, Genomma is active in Peru, Bolivia, Ecuador, Chile, Central America and Argentina, and plans to set up in Brazil and Colombia, according to its prospectus. Banco Invex held 70% of shares ahead of the sale. ZN Mexico II, an investment fund affiliated with Nexxus Capital, is a minority stakeholder. Ixe and Santander are managing the Mexican offering, to account for 30% of the total, while UBS and Merrill Lynch led the international effort.

Setting the tone for this week’s Genomma IPO, the Bolsa Mexicana de Valores suffered a lackluster equity debut that saw the shares retrace 17.5% from the high point of MXP20.00 Friday. The first domestic Mexican IPO in seven months launched at MXP16.50 Thursday and was expected to lead resurgence in local equity activity. Volume peaked in the last hour of the day, as the stock dropped to close at MXP16.49, according to Economatica. “The shares closed at the IPO price which means they were properly priced,” Guillermo Prieto, the Bolsa’s chairman, tells LatinFinance. According to Economatica, however, the Bolsa’s shares opened at MXP18.20, which means they underperformed the broader equity index IPC, which closed down less than 1%, as well as the DJI, which rose less than 1%. One banker on the deal claimed it was a success thanks to enormous trading volume, but the fact is that the stock spent most of the day falling, despite a 10% jump at the open. The issuer sold 255m shares, half of which went to locals with the rest to offshore investors. Net proceeds to the issuer will be roughly $408m, according to a banker involved in the process. UBS and BBVA led the transaction. Mexican pharmaceuticals distributor Genomma is scheduled to raise more than $300m in an IPO this week. IXE and Santander are running the deal locally, with Merrill and UBS leading the international effort.

Jamaica’s Carlton Savannah REIT has once again postponed its IPO. The offering is now set take place sometime this week, according to Dealogic. It was first scheduled for May 30, but postponed until June 13. Carlton Savannah REIT officials declined to comment.

Bankers on the blowout IPO from Brazil oil and gas startup OGX Petroleo e Gas Participacoes bagged $98.93m in gross fees, according to Dealogic. This was a spread of 2.75% on the deal which ended up weighing in at $3.60bn equivalent before a 741,800 overallotment option. The unit price was BRL1,131, the top of the targeted range, which went as low as BRL888, giving the firm a $20.43bn market cap, according to Dealogic. UBS, Credit Suisse and Itau BBA led the sale, with the following co-managers: Citi, Santander, HSBC, Votorantim and BMO.

The Bolsa Mexicana de Valores was expected to price its IPO late last night, aiming to raise MXP4.6bn if at the midpoint of a MXP14-MXP19 range. The exchange prepared to sell 278.8m shares, including an overallotment, in what is to be the first IPO in Mexico since Megacable raised MXP6.8bn in November. It is hoped that a well-subscribed result at the high end of the range would encourage others to list in what has been a dry market, with only four IPOs in 2007. Issuers have gone abroad, most notably miner Fresnillo, who sold GBP913.3m in London May 9. The deal has been in the works for more than a year, as the exchange looks to emulate the blowout initial offerings from Brazil’s Bovespa Holdings and BM&F, which raised BRL6.63bn and BRL5.76bn, respectively. Investors will be betting that the optimism for equity issues in the region’s other large market will spread to Mexico, or that the two exchanges may collaborate formally. UBS and BBVA are managing the sale.