LLX Logistica is in advanced talks with development bank BNDES to roll over debt obligations due in September, a company spokeswoman says. The Eike-Batista-controlled port and logistics company is working to renegotiate some BRL518m ($233m) in debt. No agreement has yet been made. Separately, General Electric wrote down a $300m investment in Batista’s EBX holding company, according to remarks made on a conference call by CEO Jeffrey Immelt. This followed Abu Dhabi state investment fund and fellow high-profile partner Mubadala, which recently cut back its exposure, with EBX repaying some of its debt and revising the terms of the remaining loans. Batista has pledged to pay all of his debts, he says, breaking a long period of silence Friday in an open letter published in Brazilian newspapers. “If I could go back in time, I would not have gone to the public equity markets. I would have arranged a private equity financing that would permit me to start from zero and develop for at least 10 years each company,” the billionaire writes.
Category: M&A
Ecopetrol Looks to Shed EEB Stake
Ecopetrol is considering parting with its 6.9% stake in Empresa de Energia de Bogota (EEB), and has received board approval to take the first steps. The state-owned oil producer does not indicate timing, and still must secure government approval to sell the stake, which would be worth COP912.24bn ($483m), based on Thursday’s closing price. Ecopetrol considers the asset non-strategic and would use proceeds from a sale for funding its investment plan. The city of Bogota controls EEB with a 76.3% stake.
Nutresa Enters Chile
Colombia’s Grupo Nutresa has agreed to pay $758m for Tresmontes Lucchetti, gaining entry into the Chilean food products market. The transaction comes at 12.6x 2012 Ebitda and Nutresa plans to pay for the deal using funds on hands and existing bank lines, Nutresa says. Tresmontes Lucchetti chooses the sale over an IPO, for which it made an initial registration for earlier this year. The Chilean target also has operations in Mexico, offering Nutresa expansion opportunities there. The transaction is expected to close in September or October. Lazard advised Nutresa, and Celfin advised Tresmontes Lucchetti.
OSX Considers Options for Leasing Assets
Brazil’s OSX has hired Credit Suisse to look for businesses opportunities for the assets of its leasing arm, it says. The move comes as OSX loses business from its main client, fellow Eike Batista company OGX, which has failed to meet production targets and is reducing operations. Investors and analysts are concerned about the E&P operator’s ability to service $3.6bn in debt to rely on the $1.0bn put option pledged by Batista.
Regulators Frown on Comex Sale
Mexico’s antitrust body has voted not to authorize Sherwin-Williams’ $2.34bn acquisition of Mexico’s Consorcio Comex agreed last year, Sherwin says. Officials are concerned about the US paint products company’s ability to set artificially high prices in Mexico. The buyer says it plans to address the commission’s concerns with the aim of proceeding with the deal. In November Comex agreed to sell to Sherwin for $2.34bn, in cash and assumed debt, following a competitive process. The deal came at 1.7x sales and was expected to double Sherwin’s business in LatAm. HSBC and JPMorgan advised Comex and Goldman Sachs advised Sherwin, according to Dealogic data.
Chevron Enters YPF JV
Chevron has agreed to invest in a $1.5bn joint venture with Argentina’s YPF to develop shale oil and gas deposits, it says. The deal marks the first big investment in Argentina by a major international company since the government expropriated a 51% stake in YPF from Spain’s Repsol last year. In the deal, Chevron will initially invest $1.24bn in a pilot project to develop shale deposits in the Vaca Muerta formation in the Neuquen. YPF has already invested another $260m in the project. The agreement can take advantage of new incentives allowing companies investing at least $1bn in Argentina to eventually be allowed to sell 20% of their production abroad without paying export taxes.
Glencore Peru Project up for Sale
GlencoreXstrata has formally launched the process to sell its $5bn-plus Las Bambas copper project in Peru. The miner has hired BMO and Credit Suisse to manage. A sale would satisfy a pledge made to China’s Ministry of Commerce in April, in exchange for Chinese approval of Glencore’s $30bn takeover of Xstrata. The seller has already received “expressions of interest in the Las Bambas project from a diverse group of international mining companies and potential investors,” it says. Located near the city of Cusco, Las Bambas is estimated to have more than 10.5m tons of copper resources and should begin production in 2015.
Macquarie Fibra Grows
The Fibra Macquarie Mexico real estate fund has agreed to spend MXP2.8bn ($222m) on a portfolio of six commercial properties, it says. The deal with Inmobiliario Carr includes an additional contingent payout MXP84.4m. The Macquarie fund plans to pay about MXP1bn with the issuance of 37.6m shares, and the rest with cash, possibly using credit lines. The package includes four commercial properties, one mixed use development under construction and an office building.
Fibra Uno Adds Commercial Portfolio
Fibra Uno has agreed to acquire a portfolio of 49 commercial properties from MRP Group for MXN23.16bn ($1.83bn), the Mexican real estate investment trust says. Fibra Uno adds that it expects MXP1.77m pesos in net operating income annually from the buy. The deal follows the acquisition announced last month of eight office properties, a Hilton Hotel in Mexico City and a shopping center under construction in Aguascalientes for MXP3.8bn. The fund is considering a domestic bond this year to get a leverage ratio around 30%, from 25%, after funding itself through equity sales. It raised $1.73bn-equivalent in a January follow-on, adding to the $1bn it raised in previous transactions.
Oi Sheds Tower, Cable Assets
Brazil’s Oi is set to raise BRL2.43bn ($1.09bn) from agreements to sell cellular towers and its stake in an undersea internet cable, it says. A private equity fund operated by BTG Pactual has agreed to pay BRL1.75bn for the Brasil Telecom Cabos Submarinos, an operator of 22,500-km of cables connecting the US, Bermuda, Colombia, Venezuela and Brazil. Separately, it agreed to transfer the use and commercial rights of 2,113 towers to SBA Communications for BRL687m. The telecom is raising funds for infrastructure buildout this year. A BRL800m domestic bond was recently halted, though the company is expected to proceed with it later this year. An official at Oi did not respond to a request for additional comment.