Mexico’s Fibra Uno, a real estate income trust, has agreed to purchase a package of real estate assets totaling MXP11.6bn ($881m), it says. The deal includes the assumption of MXP8.4bn in debt. The package includes 7 commercial complexes, 5 office buildings, 3 industrial properties and the concession to operate a commercial area within a port complex, located in the states of Quintana Roo, Jalisco, Nuevo Leon, Nayarit and Mexico, and in Mexico City. The transaction is expected to close by year-end. Fibra Uno has raised MXP12.5bn in two visits to the capital markets, becoming the first and so far only real estate trust in Mexico.
Category: M&A
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Indians Quit Bolivia
India’s Jindal Steel & Power has terminated its $2.1bn contract with the Bolivian government for the El Mutun iron ore project, it says. The exit is prompted by the Bolivian government’s unwillingness to supply 10m cubic meters per day of gas within 180 days of signing the contract to the company’s facilities, as was originally agreed, the company says. Instead, the government offered 2.5m cubic meters a day from 2014. Jindal adds that the government also didn’t accept its request to scale down the investment, given the shortage of gas. It plans to pursue international arbitration. The contract for mining and steelmaking was originally signed in 2007.
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Posadas Shifts Focus to Ride Mexican Growth (1)
As part of a continuing strategy to strengthen its balance sheet and refocus on Mexico, Grupo Posadas has sold its South American hotels to France’s Accor for $275m, it says. The deal also reflects a renewed focus on Mexico’s domestic market at a time when economists are forecasting better numbers for growth in the country and in the tourism sector. “We have completed a very satisfactory transaction that will allow us to reduce our debt levels and look forward to further growth and strengthening our leadership position in Mexico,” Ruben Camiro, Posadas’ CFO, tells LatinFinance. Funds from the sale are going to be used to pay down debt and contribute to the company’s domestic growth. Posadas’ growth is likely to be organic, he says, with no plans for acquisitions in Mexico. The deleveraging process has been a long one for Posadas, which was caught on the wrong side of currency swaps during the crisis and has struggled with liquidity since. It raised MXP900m ($71m) through the sale of convertible 9.0% 2014 domestic bonds to existing shareholders in March, bringing leverage to near 6.0x from 6.8x at year-end 2011, according to Fitch, which rates Posadas B minus. Camiro says the company could look at the bond market next year, depending on maturities available and market conditions. The company has $165m-equivalent in local bonds due in April 2013. Monday’s sale proceeds will also go towards that, and the company could use the bond market to improve its maturity profile. In forecasting better GDP growth numbers in the next 5 years for Mexico, economists point to tourism as one of the many sectors that would revive with a continued recovery in the US. In fact, a recovery strong enough to draw visitors outside the US, but not strong enough to send travelers further than next door to Mexico, would suit the industry quite well. “Mexican tourism has been picking up quite interestingly this year,” Camiro says, noting growth in Mexico not seen since the crisis. A bette
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Millicom Buys in Paraguay (1)
Luxembourg-based telecom Millicom International Cellular has agreed to acquire Cablevision Paraguay for $150m, it says. The buy accelerates growth in Millicom’s fixed broadband services, says a person familiar with the deal, noting that CableVision Paraguay provides television and some fixed cable services to about 470,000 households in the country’s capital. Cablevision, meanwhile, is analyzing investment alternatives for the use of funds. Millicom declined to disclose its advisors. Cablevision worked with Saenz Valiente & Asociados, Errecondo, Salaverri, Dellatorre, Gonzalez y Burgio, as well as with Estudio Caniza in Paraguay. The deal is expected to close this year, subject to approvals.
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Mexichem Renegotiates Bothersome Wavin Debt
Mexichem has wrapped up negations with creditors of recently acquired Wavin, it says, renegotiating terms on EUR320m ($390m) in debt. Agreeing to pay down some of the Dutch pipe makers debt, the amount has been lowered from EUR440m, according to an official at the Mexican petrochemicals producer, generating annual savings of EUR3.2m. Several restrictive covenants have also been eliminated. The official declines to comment on the interest on the debt package due 2015, noting only that 15bp-20bp have been shaved off as a result of the negotiations. Mexichem in May surpassed 95% ownership of Wavin shares, spending nearly EUR400m, and has delisted them.
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Australians Take Brazilian Mining Stake
Australia Acquisition Corp has agreed to purchase a 9.7% stake in Brazil’s Ferrous Resources from Harbinger Capital Partners, it says. The Australian investment vehicle will swap 9.3m shares, worth about $93m, for the stake, as part of a broader $350m transaction that also involves Australia Acquisition getting Asian gaming assets. The transaction should be completed by august. Ferrous operates 6 iron ore mines in the states of Minas Gerais and Bahia. PrinceRidge advised Australia Acquisition.
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BTG, Agnelli to Launch Mining Operation
BTG Pactual has teamed up with former Vale boss Roger Agnelli to create a new mining company, BTG says, initially investing up to $520m. The new company, known as B&A Mining, is formed from BTG’s private equity arm and Agnelli’s AGN Participacoes, and will focus on the exploration and development of fertilizer, iron ore and copper assets in Brazil, Latin America and Africa. The company says it plans to play a role projects from greenfield stages through to production, partnering with junior and medium-sized miners. Agnelli will be chairman, with former Vale executive and current AGN CEO of natural resources Eduardo Ledsham as CEO. B&A is expected to begin operating within 60 days.
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Codelco and Anglo Want More Time to Talk
Anglo American and Codelco will ask for a second extension, to mid August, to finish discussions aimed at resolving a dispute over ownership of Anglo’s Chilean unit, Codelco says. The pair, fighting over the Anglo American Sur mine, had in May requested a pause in court proceedings to allow for talks, and pushed back the first June 22 deadline to July 17. Coldelco wants to exercise a decades-old option to buy 49% of Anglo American Sur. Anglo agreed in November to sell 24.5% of the unit to Mitsubishi for $5.39bn, which Codelco saw as an attempt to block it from exercising its option fully. “The negotiations between the two firms continue and there is still no deal between the parties,” Codelco says.
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Itau and BMG in Payroll Tieup
Itau Unibanco and Banco BMG have agreed to form a BRL1bn ($492m) payroll lending joint venture, the two Brazilian banks say. The deal allows Itau access to the fast-growing payroll lending segment, and allows BMG – at a time when costs of funding for mid-size banks has shot up – to continue lending in the sector and worry less about capital. Itau is to hold 70% in the vehicle, to be called Banco Itau BMG Consignado, and BMG 30%. The joint venture’s portfolio of loans is expected to reach BRL 12bn in the next two years. Itau may provide BRL300m in credits, under the payroll deduction system, per month. Itau has an option to buy out BMG’s stake in the venture. “Given BMG’s successful operations in the direct payroll debt loan market, Itau expects to achieve leadership among private sector banks in this segment. This transaction is another step by Itau to operate with assets of lower risk and spread,” Itau says. The deal is expected to close in 90 days.
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Vale Unloads European Assets
Vale has agreed to sell its European ferromanganese assets to Glencore for $160m cash, it says. In the name of “optimization of the portfolio of assets,” the Brazilian miner parts with 100% of the Vale Manganese France and Vale Manganese Norway.