Category: Equity

Solvay Indupa, a petrochemicals company headquartered in Buenos Aires and Sao Paulo, plans an IPO on the Bovespa by listing Brazilian depository receipts (BDR). UBS Pactual is slated to lead the offering, for which details on number of shares and price range are yet to be divulged. Petroquimica Comodoro Rivadavia is another Argentine petrochemical company that planned a listing of BDRs, according to a filing made last September. However, that process, being led by Credit Suisse, has since been interrupted, according to the CVM.

Brazil’s Norcon has filed to sell shares on the Bovespa. The 50-year old residential builder and developer based in the northeastern state of Sergipe plans to use the proceeds for land acquisition, infrastructure development, refinancing of debt and for general purposes. No further details were disclosed. Credit Suisse will manage the sale. While close to 20 residential developers have gone public in the past two years causing sector fatigue among investors, few developers outside the Sao Paulo and Rio areas have attempted offerings. That should provide Norcon with a much needed edge when it comes to marketing the deal to the buyside.

Brazil’s stock exchange saw foreign investment inflows of BRL598m in the week ended February 26, according to Itau, which cites its own data and Bovespa numbers. That continues a trend of inflows that started in the previous week, and reduces the YTD net outflow to BRL4.057bn. The Bovespa jumped 5% in the same period, and is up by the same amount YTD. “We have seen a recovery trend in the foreign investment flow to the Bovespa, especially during February, after several January outflows,” says Itau. “This is definitely in line with the positive scenario we are forecasting for Brazilian equities.” However, externally, the picture appeared to worsen during the period. The Dow was down sharply Friday and Itau concludes that volatility will remain high for the foreseeable future.

Cosan will Thursday give investors in Cosan SA, the original, Bovespa-listed entity, the chance to migrate shares to Cosan Ltd, a US-listed entity created last summer whose voting shares are 90% controlled by a group led by founder Rubens Ometto Mello. The process is part of a promise Cosan made to shareholders to extend the right to own shares in the new holding company. But it is more of a gesture than anything that will concretely alter the status quo. Holders of 272.5m Cosan SA shares will have the option to switch into Cosan Ltd A shares or BDRs. Investors that held Cosan SA on July 26 2007 also have the option to swap their 1-vote A shares in Cosan SA for 10-vote B2 shares in Cosan Ltd They will be subject to a 3-year lockup that effectively requires them to hold onto 100% of the non-listed stock, lest it be converted into 1-vote A shares. If they do choose that path, they would still have far less than 10% of Cosan Ltd voting rights, since 90% of the voting capital in Cosan Ltd is held by Ometto Mello. “At current prices, we see no reason for shareholders to participate in the exchange offer, unless they have a very large position and liquidity becomes an issue for them,” says Itau. Investors have until April 11 to trade in CSAN3 shares.

Brazilian real estate developer Rossi Residencial has canceled plans to hold a primary public offering on the Bovespa. Joining a growing list of would-be Brazilian equity issuers, the company cites “current market conditions” for pulling the sale, which was announced in January. Credit Suisse and UBS were to lead the transaction.

Bookrunners Credit Suisse and Citi received $5.12m in gross fees from the Brazilian private equity firm’s BRL319m secondary offering of BDR’s on the Bovespa, representing a spread of 2.75%, according to Dealogic. The offer, placed Friday, saw 5.4m shares priced at BRL59, above the initial guidance of BRL57.25. Proceeds went to funding investments in Brazil and Mexico. One BDR is equal to an A ordinary share.

Brazil’s two main exchanges, the Bovespa and the BM&F, are officially in talks to merge. The two entities made a joint announcement saying that for 60 days, they will be in exclusive discussions to combine their operations. The move was expected, and the Bovespa’s Mifano went as far as telling LatinFinance earlier this year that combining the two platforms would make sense and talks would eventually take place. The talks are being held now because a higher concentration of the exchanges’ shares in fewer hands makes it easier to approve a deal, according to Itau. The lockup period for the Bovespa’s stock expires April 22, while the BM&F’s ends on May 30. Currently, the Bovespa has a 41% free float with another 24% to be released on the expiration date. The BM&F’s free float is 33% with 20% more to come on May 30, says Itau. For tax purposes, it would make more sense if the BM&F acquired the Bovespa, says the shop, pointing to the higher amount of goodwill that could go untaxed if that were to be the case.

Chile’s Masisa has filed to delist its ADS from the New York Stock Exchange, it said. The furniture maker cited the fact that less than 5% of its outstanding common stock is listed via ADS, and a reduction in expenses as the main motive for the move. Holders may exchange the ADS for common shares of cash.