Category: Equity

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.

Brazil experienced strong inflows in foreign capital in July and August, despite market turmoil that resulted in a 17% drop in the Bovespa between July 16 and August 16. “Partial data through August 21 showed a $6.1bn surplus, despite external turbulence,” says JPMorgan. “Strong FDI and booming equity investment sustained a hefty capital account surplus last July,” it adds. In general, unwinding of local positions by foreigners has been contained and the market technicals are improving, adds the shop. Outflows totaled $800m in the same period, JPM adds.

Trisul, a São Paulo-based real estate developer, has filed to go public on the Bovespa via bookrunner Morgan Stanley and joint lead JPMorgan. The company, the product of a recent merger between Tricury and Incosul, has not released details on the size or number of shares. In the filing, the company states it has a BRL190m 25-year line of credit and BRL71m in outstanding construction-related loans from local banks with maturities ranging between 2008 and 2010.

Banco Industrial, a mid-market bank, has filed to go public on the Bovespa, via UBS Pactual with BBI as a co-lead. It will be the 10th bank to file this year. Others in the pipeline include Banco Fibra, which filed two weeks ago, and BicBanco, which is likely to be the next issuer from the sector. BicBanco will issue 62m shares, 42m of which will be primary shares at a yet undetermined price range. The average offer price for mid-market banks in Brazil this year has been BRL14.50, according to Dealogic, which would imply a potential raise of BRL900m for BicBanco, though no official price range has been released. UBS Pactual is leading, with BBI, Banco Fator and HSBC as co-leads. So far this year there have been seven mid-market bank IPOs in Brazil, according to Dealogic.

Argentine petrochemicals firm Petroquímica Comodoro Rivadavia (PCR) is considering an IPO in Argentina, Brazil, and possibly in other international markets. The company hopes to raise as much as ARP930m ($295m) and may also issue up to $250m in bonds. Last month, Banco Patagonia listed on the Merval, the Bovespa and New York, raising $260m. PCR’s plan is subject to shareholder approval, which is expected at the end of August. Last week, Argentina’s MercadoLibre , an online auction company, priced an IPO on the Nasdaq at $18, in one of the most volatile days on global equity markets since the aftermath of the terrorist attacks of 9/11. MercadoLibre saw its shares soar 58% in the aftermarket and has held steady off the highs.

SulAmérica, a Brazilian insurance provider 49% owned by ING, is close to filing IPO documents with the CVM, according to local bankers away from the deal. Unibanco is heard to have been tapped for the deal. SulAmérica would join a growing number of financial companies accessing Brazil’s public markets. A slew of mid-market banks, a giant credit card company, and two offshore asset managers have already gone public, with mixed results. In Brazil, consumer plays like credit cards and large retail banks have been among the strongest performers.

Cosan raised just $1.05bn with its US IPO and Brazilian follow-own, significantly less than the desired $2.00bn, a projection based on Cosan’s $18.71 closing price June 25. Cosan’s stock has tumbled nearly 45% in the past three months and 25% alone in the last week. The issuer sold 100m class A shares in the US and class A BDRs in Brazil at $10.50 a share. The underwriters have a 15% over allotment option, after which the company will launch an offer to minority shareholders to exchange existing Class A shares of Cosan SA, traded in São Paulo, for BDRs. In late July, Cosan created a new class of common shares for minorities – the Class B series 2. This stock comes with voting rights but subjects minorities to the same lockup period as the controlling shareholder and will convert to Class A shares if sold. The Class A shares will not have voting rights but more liquidity. The offshore Cosan Ltd will delist Cosan SA in coming months as liquidity migrates to Cosan Ltd, according to analysts. Credit Suisse, Goldman Sachs and Morgan Stanley led the equity offer.

Brazilian sugar producer Cosan should price a global follow-on offering, which is also its US IPO, today. The offering of 100m Class A shares in the US and Class A shares in the form of Brazilian depositary shares in Brazil will allow Cosan to incorporate in Bermuda and propel the company into the global ethanol industry. Bankers away from the deal expect it to fly on global demand for ethanol stocks, in spite of a negative response from some minority shareholders to the reorganization. Cosan listed on the Novo Mercado, the segment of the Brazilian stock exchange with the highest standards of corporate governance. Cosan’s stock closed at the BRL equivalent of $12.98 yesterday, down from $18.71 on June 25 when the deal was announced. The company will sell the 100m shares based on the last offer price, and the underwriters have a 15% over allotment option. After the global offering, Cosan will launch an offer to minority shareholders to exchange their existing Class A shares of Cosan SA, traded in São Paulo, for BDRs. The restructuring will ensure controlling shareholder Rubens Ometto Silveira Mello maintains control over the company. Credit Suisse, Goldman Sachs and Morgan Stanley are leading.

Mid-sized Brazilian bank Banco Fibra has filed to list on the Bovespa. The shares will be listed in Brazil and sold to foreign buyers in the 144a market in the US. The IFC invested $20 million in June to take a 7.9% stake in the bank, which is owned by Brazilian steel conglomerate CSN. Fibra will be the seventh Brazilian bank to list locally this year. Credit Suisse and Itaú BBA are leading. Credit Suisse is also heard to be bookrunner on two other IPOs filed with the CVM last week, real estate firm Mora Dubeux Engenharia and meat, dairy and vegetable producer Eleva Alimentos.

MercadoLibre, the LatAm equivalent of online market place eBay, priced Friday a $289.4m Nasdaq IPO at $18 on Friday, the high end of the $16-$18 range. Shares in the Argentina-based firm traded up to $29 and closed just shy of that, according to Reuters. The deal priced in the most volatile global stock market environment seen since the aftermath of the 9/11 terrorist attacks. The Nasdaq fell 0.45% Friday but closed off the low. MercadoLibre will use proceeds to repay a loan from eBay and for general corporate purposes. EBay will own an 18.5% stake in the company after the IPO. JPMorgan and Merrill Lynch were the leads.