Category: Equity

Brazil’s largest electric power distributor, Eletropaulo Metropolitana Eletricidade de São Paulo (Eletropaulo) is to make a secondary offering of shares via Bovespa worth up to $690 million. The company, part of Brasiliana Energia, is to sell 13.76 billion shares, with an option to sell an extra 2.04 billion in the face of strong demand. The shares will be sold to domestic investors and also to foreign investors as GDS. The sale of the shares will see AES Transgas Empreendimentos, a unit of US power firm AES, reduce its stake in Eletropaulo by around a third. AES will use the money raised to pay off $582 million of debt owed to state development bank BNDES. Credit Suisse is the lead coordinator of the operation.

Another Brazilian firm preparing to launch an IPO is Medial Saúde, one of the country’s leading health insurers. The listing on Bovespa’s Novo Mercado will be the first for a company in this sector. Medial Saúde is planning to offer 27 million common shares – 18 million via a primary offering and 9 million via a secondary offering. The company hopes to raise up to $292 million via the offerings. It also plans to issue ADRs on the international market. Credit Suisse will be the lead coordinator for the transaction. Also coordinating will be Citigroup, Banco Real and Espírito Santo Investment.

Alternative energy firm Brasil Ecodiesel has applied to the Brazilian securities commission (CVM) to list part of its stock on Bovespa’s Novo Mercado, joining the 34 other companies currently quoted. The listing would be the first for the sector, reflecting the huge upswing in investor interest in biofuels as world oil prices continue to climb. According to the company, Brasil Ecodiesel is the country’s largest producer of biodiesel, a product based on soya and castor-oil, with a production capacity of around 45 million liters a year. This capacity is due to increase to 645 million liters a year by March next year following the inauguration of five new plants.

Emilio José Archila, former superintendent of industry and trade, is to be the new head of Asobolsa, the Colombian Association of Stockbrokers. The Association currently represents 28 out of the 40 firms operating on the exchange, which together account for 98% of the volume traded. Archila, a lawyer specializing in anti-trust law, will take up his position at the beginning of December.

Brazilian pharmaceuticals distributor Profarma is preparing to launch an initial public offering (IPO) via Bovespa. The Rio de Janeiro-based company is among the top three medicines distribution companies in the country, controlling 8% of the market. Profarma joins the growing list of Brazilian companies going public and follows others in the health sector such as Dasa, Medial and Odontroprev to apply to list their stock.

Brazil’s largest fixed-line telecoms operator, Telemar, has decided to pull its secondary share offering on Bovespa’s Novo Mercado because of weak market conditions. It has also postponed an extraordinary general meeting, scheduled for August 22, for some time in September, yet to be decided. The company made it clear that despite the cancellation of the share offering, the objectives of the overall restructuring of its capital remain. Back in April, Telemar announced it was to restructure its share capital and unite stock from its various companies into a single class.

São Paulo’s stock exchange, Bovespa, has picked US investment bank Goldman Sachs to prepare its IPO slated for next year, according to reports in the local press. The deal would be a real coup for Goldmans, which is strong in mergers and acquisitions in Brazil but has not led an IPO of this size since 2004. Other banks vying to prepare Latin America’s largest stock exchange for its own listing next year include Credit Suisse and UBS.

Mexican Monex Grupo Financiero has delayed its IPO once more, this time until 2008 following the acquisition of Comerica Bank Mexico for an undisclosed sum. The company said it has chosen to push back plans to go public so that it can take time to better integrate the Bank, which it acquired from US-based Comerica and which it will rebrand as Banco Monex. The financial group began as a wholesale foreign exchange trader and has built itself into a group encompassing a brokerage and investment fund manager. Last October it announced it was considering apply for a banking license to establish banking operations to complement its foreign exchange activities.

Electricity provider Endesa Brasil, a subsidiary of Spanish utility company Endesa, is to launch an initial public offering of shares at the start of next year via Bovespa. The listing of Endesa’s shares on Bovespa’s Novo Mercado was a requirement of the International Finance Corporation, the private-sector arm of the World Bank, which took a minority stake in the company last month.

Brazil recorded inflation of 0.19% in July, as measured by the broad consumer price index IPCA, following a month of deflation in June. June’s price fall of 0.21%, the largest in eight years, was not repeated this month due to the rising cost of gas, transport and food. Inflation in the 12 months through July fell to 3.97%, from 4.03% in June and well within the government’s annual target of 4.5%.