Category: Equity

With the equity new issue calendar resembling a barren desert, Brazilian companies continue to file IPOs, with at least three new entrants this week. Vix Logistica, a logistics and transportation company based in the state of Espirito Santo, has filed to go public via Credit Suisse. Brazil Brokers, a real estate brokerage made up of 11 separate units focused on São Paulo’s metropolitan are, has also hired Credit Suisse for its IPO. And Marítima Seguros, an insurance company, has tapped Merrill Lynch to lead its offering, with Santander as a joint-lead manager. No IPOs have come to market in Brazil since late July, when General Shopping Brasil priced its offering on July 26, according to Dealogic. The only other Brazil-related offering came from Cosan, which priced a large, but dramatically reduced and highly protested follow-on August 16. The Bovespa closed Thursday at 52,858, well clear of recent lows.

Brazil’s CVRD is proceeding with a stock split, effective September 3 on the Bovespa. After the split, CVRD’s capital will be composed of 4.919m shares: 3.000m common and 1.920m preferred class As, including 12 golden shares. Each current share, both common (VALE3) and preferred (VALE5), will be represented by two shares post-split. On September 6, distribution of the new shares will take place, in the proportion of one additional share issued per each existing share, for the shareholders of record as of August 31. On September 13, CVRD ADRs representing common shares (RIO) or preferred shares (RIOPR) listed on NYSE will also be split. On the same day, the distribution of new ADRs, in the proportion of one additional ADR issued per existing ADR, will be finalized, for ADR holders of record as of September 5. This will maintain the ratio of one ADR to one underlying common or preferred share. Converts due 2010, series RIO and RIO P, will have their conversion rates adjusted to reflect the split.

Phones were ringing off the hook Monday at Bogota’s major brokerages as local investors called in with orders for blocks of shares to be offered in Ecopetrol’s $2.7bn equivalent IPO. The largest ever equity offering from Colombia – in its most important corporate name – has been in the works for months, with repeated calls from President Uribe for Colombians to participate in what he calls the democratization of the country’s crown jewel. But on the opening day of the offering, which will take place in three rounds – two local, one international – some local dealers said COP1,400 a share was too high. For Nelson Fernando Espinosa, of Visión de Valores, which estimates fair value based on price to EBITDA at COP1,206, the stock is still a buy, but not such an exciting one. “We’re losing some major upside in the stock by buying it at COP1,400,” he tells LatinFinance. Others, however, believe the price is right. Corredores Associados, a local brokerage, bases its estimate on price to book value and price earnings ratios at comparable E&P companies around the globe, which come in at slightly higher levels than Ecopetrol. “We originally had the price at COP950-COP1,050, but adjusted that view when the underwriters released additional information,” says Raul Pacheco, an analyst at Corredores, referring to the company’s plans for expansion and new businesses. The first round, for locals associated with Ecopetrol exclusively, will conclude September 25.

Laep Investments, a Bermuda-based private equity turnaround shop that owns 98.5% of Parmalat Brasil, is planning to list on the Bovespa, according to a filing with the CVM. Run by a group of Brazilians, the two most senior of which are Marcus Alberto Elias and Eduardo Aguinaga de Moraes, founders of TCW/Latin America Private Equity Partners, Laep took control of Parmalat in 2006 during its in-court restructuring. It established new ownership structures to maintain the dairy producer’s operations and relations with its producers and providers. Details on the amount of the capital raise and number of shares are unclear. UBS Pactual will lead the Laep deal, which will be offered offshore and as BDRs locally.

Shares in Norsemont Mining, the Canadian exploration company, started trading this week on the Bolsa de Valores de Lima following a listing sponsored by Credibolsa. The share was quoted at PES1.31 in zero volume Tuesday and listed under “junior” stocks by the BVL. The Lima exchange is heavy on mining shares and has performed well over the last six years. Norsemont is involved in the Constancia copper-moly-silver project, which it expects to be in production as early as 2011.

Phones were ringing off the hook Monday at Bogota’s major brokerages as local investors called in with orders for blocks of shares to be offered in Ecopetrol’s $2.7bn equivalent IPO. The largest ever equity offering from Colombia – in its most important corporate name – has been in the works for months, with repeated calls from President Uribe for Colombians to participate in what he calls the democratization of the country’s crown jewel. But on the opening day of the offering, which will take place in three rounds – two local, one international – some local dealers said COP1,400 a share was too high. For Nelson Fernando Espinosa, of Visión de Valores, which estimates fair value based on price to EBITDA at COP1,206, the stock is still a buy, but not such an exciting one. “We’re losing some major upside in the stock by buying it at COP1,400,” he tells LatinFinance. Others, however, believe the price is right. Corredores Associados, a local brokerage, bases its estimate on price to book value and price earnings ratios at comparable E&P companies around the globe, which come in at slightly higher levels than Ecopetrol. “We originally had the price at COP950-COP1,050, but adjusted that view when the underwriters released additional information,” says Raul Pacheco, an analyst at Corredores, referring to the company’s plans for expansion and new businesses. The first round, for locals associated with Ecopetrol exclusively, will conclude September 25.