Category: Equity

Brazilian state-run Banco do Brasil (BB) may take over the running of the Santa Catarina state bank (BESC), according to a statement issued by the federal bank. Shares in BESC took off on Friday, rising over 46% in trading on Bovespa, on news of the possible takeover.

Mexico’s Banco Compartamos is set to become the first Latin American microfinance institution to raise equity capital when it prices an IPO on the Mexican Bolsa today, Thursday. Carlos Danel, co-executive director at Compartamos tells LatinFinance that the offering of secondary shares will allow some shareholders to partially monetize their stakes in the bank. The offer, which comprises an international 144a Reg S tranche and a Mexican retail tranche, should price in the range of 30 to 40 pesos a share, and could raise as much as $400 million, according to a source close to the deal. Credit Suisse is global coordinator and bookrunner of the 144a Reg S tranche, pitched at qualified institutional buyers in the international market. Banamex and Banorte are handling sales to Mexican retail. Danel, who has been meeting with investors in Mexico, Brazil and Europe, says the price range has already been revised upwards from 28 to 35 pesos per share. An equity banker away from the deal says the price adjustment indicates pent up demand for a name in a sector and country that has scarcity appeal. Mexico has logged just one equity deal so far this year, a $217.17 million follow-on offering for steel manufacturer Grupo Simec, compared to Brazil’s 19 deals totaling $6.26 billion, according to Dealogic. This is the first equity offer for a Latin American microfinance institution, but not the first from emerging markets. Indonesia’s Bank Rakyat raised $480 million in equity in October 2003, through UBS and Bahana Securities.

There are just two equity deals on the block for this week, according to Dealogic, and April overall shows a Brazil real estate bias. A BRL346m ($170m) IPO for Brazil’s CR2 Empreendimentos Imobilarios should price Wednesday through Unibanco and the initial range is BRL20-25. The primary issue from the busy real estate sector pays 4.5% gross spread, according to Dealogic. Ultrapetrol of the Bahamas is scheduled Thursday to price a follow-on for up to $199m via UBS and Bear Stearns. The $173m issue has a greenshoe option. The tanker fleet owner was trading at $17.69 before the announcement. Jeffries, Raymond James and DVB are co-managers. On the docket for next week are AGRA Empreendimentos Imobilarios’ BRL582m IPO through Credit Suisse, marketed at BRL7-10, Cremer’s BRL508m IPO at BRL15.50-19.50 through Merrill and Credit Suisse and Wilson Sons’ $259m IPO at $10.00-13.50 via CS and UBS Pactual, according to Dealogic. All have a 15% greenshoe.

Moody’s has put the B1 rating of Brazil’s JBS-Friboi on review for upgrade. “The review of JBS’s B1 rating was prompted by the company’s decision to use part of the IPO proceeds for debt reduction, resulting in improved leverage indicators,” says Moody’s analyst Soummo Mukherjee. The review will primarily focus on JBS’s financial and growth strategy for the next few years. Promotion to Ba3 will largely depend on JBS’s ability to keep debt to EBITDA below 3.5x on a sustainable basis, and the prospects for the company’s free cash flow generation to be less negative than historically. JBS is the fourth largest beef company in the world in terms of cattle slaughtering capacity and the largest beef processor and exporter in Brazil, Argentina and Latin America.

Evandro Pereira has been named head of LatAm ECM at UBS, replacing Sebastian Chatel who moved to Credit Suisse to take on the same role. Pereira was formerly UBS-Pactual’s head of capital markets in Brazil, on the Pactual side. He will report to Tom Fox and Matthew Koder, co-heads of Americas ECM.

Wilson Sons shipping agency, headquartered in Bermuda, is to issue Brazilian depositary receipts (BDRs) via an IPO on the local Bovespa exchange. The company will issue 11 million shares via a primary offering and 11 million BDRs through a secondary offering. The shares will be sold in Brazil and also to qualified foreign investors under rule 144A. The company will be only the fourth company to issue BDRs and joins Spain’s Telefónica, investment fund GP Investments and Swiss retailer Dufry. Credit Suisse is coordinating.

Brazilian cleaning company Atmosfera Gestão e Higienização de Texteis has pulled its IPO and will wait until conditions improved, reported local media. The company had hoped to raise around $150 million (300 million reais) from the sale.

Credit Suisse has bolstered its position as the leading Latin equity house by poaching Sebastian Chatel from arch rival UBS, where he led ECM. Credit Suisse and UBS are slugging it out for supremacy in LatAm equities, especially Brazil, whose red hot equity market is expected to yield a significant amount of volume over the next few years, particularly in IPOs from new sectors. UBS was commended for ECM deals in 2006 including the groundbreaking Banco Macro IPO in Argentina and the CESP follow-on. It is understood to have accumulated in excess of 20 mandates to execute this year. Chatel is expected to take on his new role in June.

Alvaro Rodríguez, the finance director of Mexican glassmaker Vitro has resigned, the company said in a filing with the Mexican Stock Exchange. Enrique Osorio, formerly finance director of troubled biotechnology firm Savia, will replace Rodríguez and will work together with the latter until the middle of April to ensure a smooth transition, said Vitro’s chief executive, Federico Sada. Investors will watch with interest to see what direction the company takes following Rodriguez’s departure. He was responsible for the much-praised recent debt restructuring of the company.

Chilean retailer Falabella is to increase its capital by around $1 billion via an offering of 270 million new shares. In a filing with the Santiago Stock Exchange, the company said it will put forward the proposed capital increase to shareholders at an extraordinary meeting called for April 24.