Eneva, the Brazilian generator known as MPX until control was sold to E.ON, has agreed to go on the hook for BRL200m ($92m) in OGX debt, in exchange for control of an OGX gas company. If OGX defaults, Eneva will pay the amount to Itau, Morgan Stanley and Santander, Envea says. In exchange, it will get a 67% stake in natural gas producer OGX Maranhao. OGX missed a $45m coupon on its dollar bonds October 1 and will officially become LatAm’s largest ever corporate default at the end of a grace period Thursday. The Eike Batista oil company has been negotiating with banks, bondholders and potential outside equity investors for the past several weeks. No concrete agreements have yet been reached to restructure the debt or inject new equity into OGX, and a bankruptcy filing is expected as soon as this week. Elsewhere in the EBX group, miner CCX has named Gelson Batista as CEO and investor relations officer. He had been CCX’s mining officer since September, and has been with the Colombian coal miner since last year. Jose Costa left the role of CCX CEO at the end of September, after being named to the post in October 2012. At LLX, the logistics business in which Batista sold control this year to private equity firm EIG, Marcus Berto resigned as CEO. CFO Eugenio Figueiredo is to assume his duties until a replacement is named.
Category: M&A
Fibra Uno Adds Properties
Mexico’s Fibra Uno has agreed to spend $275m to acquire 33 properties from Mexican developers Grupo GP and Clarion Partners, it says. The package includes 29 industrial properties and four additional properties for its land bank. Fibra Uno – the first Fibra in the asset class to IPO, in 2011 – currently has 316 properties in Mexican 29 states with a gross leasable area of 3.1m square meters.
CFR Advances Equity Raise
Chile’s CFR Pharmaceuticals has approved a $750m equity capital raise, it says. The transaction, done to finance the $1.3bn purchase of South African drugmaker Adcock Ingram, includes 3.0bn shares to be sold at CLP125.0-CLP134.5 ($0.25-$0.27) each. CFR first proposed the bid in July for the South African. It is paying ZAR47.29 ($4.86) cash per Adcock share and issuing up to 15.44 new CFR shares per Adcock share, or a total of ZAR75.92 per share. The deal is expected to generate revenue and cost synergies of up to $440m, would see Adcock delisted from Johannesburg, where CFR would have a secondary listing. Credit Suisse is advising CFR, with IMTrust providing an evaluation of Adcock shares. Deutsche Bank and JPMorgan are advising Adcock.
AMX Throws in the Towel in Holland
America Movil (AMX) has withdrawn its offer to buy the portion of Dutch telecom Royal KPN it does not own, it says. The move momentarily halts the Mexican telecom’s expansion drive, though it pleases those who fretted about the increased leverage AMX needed to pull of the buy. Mexican shops Monex and Ve por Mas called the news “positive” for this reason. KPN’s foundation moved last month to block the deal by exercising rights to take a 50% stake, and the buyer finds the move made its offer unviable. AMX had offered EUR7.2bn ($9.7bn), or EUR2.40 per share for the remaining 70%. Deutsche Bank was its advisor. AMX does not indicate any plans for its 30% stake.
Batista Cedes Control of Port Project
Eike Batista has finalized a deal selling control of the MMX Porto Sudeste project to Trafigura and Mubadala, MMX says. The Dutch commodities trader and the Abu Dhabi sovereign wealth fund get a 65% stake in the iron ore port, in exchange for $400m and the assumption of BRL1.3bn ($596m) in debt at the MMX Sudeste Mineracao sister unit. The two buyers have also agreed to provide MMX Sudeste Mineracao with a $100m trade finance facility, and holders of special MMX unit shares would receive a royalty for iron ore shipped after the port makes a profit. MMX keeps 35% and retains an option to buy back a 7.5% stake at closing. MMX Porto Sudeste, loceated in Rio de Janeiro state, is slated to start operating next year. The deal follows Batista’s sale of control of MPX to E.ON in March and of LLX Logistica to EIG in August.
Bradesco Takes Control of Odontoprev
Bradesco Saude has agreed to take control of Brazilian dental benefits provider Odontoprev by acquiring a 6.5% stake from CEO Randal Luiz Zanetti, the healthcare unit of Bradesco says. The deal takes Bradesco Saude’s ownership to 50.01% of Odontoprev. The Brazilian bank does not give the price it paid. Zanetti will step down and become Odontoprev’s deputy chairman as well as a board member of the Bradesco Seguros insurance unit. He will be replaced by Mauro Figueiredo.
Indians Increase Holding in Petrobras Block
India Oil and Natural Gas Corporation (ONGC) subsidiary ONGC Videsh has moved to acquire an additional 12% stake in a Petrobras oil block in the Parque das Conchas in Brazil’s Campos Basin for $529m, it says. The Indian says that it, along with Shell, are exercising preemptive rights to block a $1.54bn agreement Petrobras made in August to sell 35% of the asset, known as BC-10, to China’s Sinochem. ONGC Videsh initially entered the BC-10 block in 2006, buying a 15% stake, and this acquisition would bring its stake to 27%. Prior to August, Shell owned 50% of BC-10, Petrobras 35% and ONGC 15%. Petrobras is working on a plan to shed $10bn in non-core assets by 2017.
Chilean Gets PE Investment
Tanner Financial Services has agreed to sell a 27% stake to a fund linked to US investment specialist Capital Group, for $200m, it says. The transaction is to be done through a capital raise that brings the value of the Chilean to $740m after the sale, according to people familiar with the transaction. Tanner did not work with outside investment banks. The capital will be used to grow the business, especially in leasing products. The financial services specialist also hopes to see its ratings raised with its growth in size – it is rated A on a national scale.
Batista Units Continue Strategic Discussions
While Eike Batista’s OGX and OSX units work out their fates with lenders, coal miner CCX Carvao da Colombia has started the search for investors in the San Juan coal mine and an accompanying logistics project which includes a port and railroad, CCX says. CCX remains in talks to sell the Canaverales and Papayal open-air mines to Transwell Enterprises. Separately, OGX is in talks with holders of $3.6bn face value of its international bonds ahead of the expiration of a 30-day grace period at the end of the month. OGX did not make its October 1 coupon payment on its 2022 bonds. A default on the 2022s and 2018s is widely expected by analysts, likely accompanied by a distressed exchange or bankruptcy filing. OGX bonds traded at 7-8 cents on the dollar Tuesday and OSX’s in the mid 70s, according to a trader.
Saba Readying Strategic Deal
Grupo Casa Saba is in “an advanced stage of negotiations” with a potential partner, it says. The Mexican pharmacy chain and distributor offers few details, noting that it is considering “strategic options,” that could include an outside investment or an M&A transaction. Nothing binding has yet been agreed. Saba is advised by Estructura Partners, according to a person familiar with the matter.