Chilean conglomerate Sigdo Koppers (SK) plans to raise $370m via an equity rights offering. Timing has not been determined as shareholders must still approve the offering. The move comes after SK paid EUR550m ($790m) for Belgian portfolio company Magotteaux. That purchase was initially funded with an 18-month bridge loan from advisor BNP. The group has been shedding non-core assets in order to be more acquisitive in the mining sector. SK shares closed at CLP752 Tuesday.
Category: Chile
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ACS Sells Stakes in Chilean Toll Roads
Spanish construction company Actividades de Construccion y Servicios (ACS) has agreed to sell positions in 2 Chilean toll roads to a consortium led by Toronto-based Brookfield Asset Management for EUR216m ($292m). In the deal, ACS sells its roughly 50% stake in Vespucio Norte and its stake in Tunel de San Cristobal. Rotating concession assets, operating them for a short time and selling them to infrastructure or pension funds has always been a part of ACS’ strategy, says an industry analyst, who expects ACS will remain in Chile. “They decided to carefully review all its assets. They decided these are mature enough to be sold and in a time, in a country where there is still some appetite from investors for this type of asset,” the analyst says. The analyst declined to estimate the multiple in the transaction, but notes that 1.5x book value is typical in the sector. A second infrastructure analyst suggests the deal was roughly 2x price to book, which is “more or less an average sector multiple.” A spokesperson at Brookfield pointed out that the company likes the economic outlook in Chile, and toll roads offer in essence a new operating platform for the company. “Brookfield is looking at a number of opportunities to purchase infrastructure in the Americas, in North and South America, from the European companies that are refocusing on their home markets,” he says. Earlier this month Chilean Inversiones Infrastructura Dos acquired 50% of a highway project from Sweden-based Skanska for $42.8m equivalent.
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Italians Consider Chilean Toll Road IPO
Italian infrastructure investment firm Atlantia has been holding meetings with Chilean investors regarding the potential IPO of toll road assets, according to market participants. The discussions are said to be preliminary at this point, especially given overall volatile market conditions, but the company is interested in floating part of its toll road package – though which roads would be involved is unclear. Credit Suisse, Goldman Sachs, Santander and UBS are said to be managing the process. Atlantia directly or indirectly owns 50% or greater stakes in 8 Chilean concessions and 1 Brazilian concession, according to its website. Earlier this year it paid $639m equivalent for stakes in 3 Chilean roads from Spain’s Acciona.
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Santander Chile Plans Subordinated Bond
Santander Chile has filed a shelf for up to UF4m in 30-year subordinated bonds, it says. The bullet-maturity notes would pay a coupon of 3.9% and are rated AA on a national scale. There is no information available as to the timing of issuance under the program. Santander would manage the transaction. Chile’s bond market has remained active in recent weeks, with a few more issuers still in the pipeline. Electricity transmission company Saesa , food products producer Agrosuper and Banco Falabella are all expected by the end of October, though none has set a date yet, bankers say.
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Transelec Gets Private Placement
Chile’s Transelec has raised UF1.9m though a private bond placement, it says. The power transmission company’s 2032 bonds priced at 97.55 with a 4.05% coupon to yield 4.23%. Corpbanca managed the sale. The bonds represent the remainder of 2032 bonds authorized for a January sale, when Transelec raised UF1.5m of bonds priced to yield 4.24%. Transelec is rated A+ on a national scale.
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MILA Eyeing Mexico, Panama and Fixed-Income
Despite low volumes and a postponed Lima-Bogota Bolsa merger, exchange officials from the Mercado Integrado Latinamericano (MILA) markets see tie-ups with Mexico and Panama in the medium-term, as well as fixed-income cross-listing. “The two potential names are Mexico and Panama,” says Francis Stenning, CEO of the Bolsa de Valores de Lima. He notes Panama has shown the most interest. The next 5 years will be dedicated to improving the cross-listing platform and expanding to other countries, he adds. Thereafter MILA could focus on full exchange integration, and adding fixed-income cross-listings. There should also be room to develop additional products. “We would like to develop futures attached to MILA products,” says Maria Jose Ramirez, vp of the Bolsa de Valores de Colombia. Such products may not generate high volumes, but they should lure foreign investors, which is the true goal of the platform launched in March, Stenning says. Activity has been low so far, but it is hoped the Andean economies continue to remain isolated from global troubles and attract more outside funds. “Asia’s transformational growth story should continue,” even if events in Europe worsen, a particularly positive scenario for the Andean countries, says Jason Press, equity strategist at Citi. He notes a disconnect, in that global equities have priced in a global recession, while commodity prices are reflecting expectations of EM growth. Citi finds the latter to be the more accurate of the two scenarios. Peru, the highest beta among the three MILA markets, would see the most upswing, with Peruvian banks and mining companies such as Southern Copper particularly well-positioned. However, Peru would also be the most vulnerable to a double-dip. Stenning, Ramirez and Press spoke at a conference organized by Bloomberg Thursday in New York.
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Banco Falabella Seeks Chile Bond
After raising COP150bn ($84m) in Colombia’s local market two weeks ago, Banco Falabella is now looking to sell up to UF5m ($225m) equivalent in bonds in its home market. The lending arm of Chilean retailer Falabella is heard targeting 2018 and 2021 bonds. Details have not been finalized, but the issuer should start meeting investors in Chile, Peru and Colombia within the next two weeks, bankers on the deal say. IMTrust is lead.
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Agrosuper Plots Local Bond
Chilean food products company Agrosuper plans to raise up to UF5m ($230m) in the country’s domestic bond markets. The issuance is still awaiting final regulatory approval, but a banker managing the sale says it is expected in the first half of October. The issuer will choose among the following options: an up to UF5m 3.4% 2018 inflation-linked bond, an up to CLP100bn 6.1% 2018 peso-denominated bond, an up to UF5m in 3.4% 2021 inflation-linked bonds and up to UF5m in 3.8% 2032 inflation-linked bonds. Proceeds are to be used to repay debt and for expansion. Banchile and Larrain Vial are managing the sale, rated AA minus on a national scale. Agrosuper is ramping up its export capacity, and was also – at least before volatility hurt the regional new equity issuance pipeline – in the early stages of planning an IPO, also through Banchile and LarrainVial.
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Quinenco Seeks Capital Raise
Chile’s Quinenco is looking to raise CLP225bn ($477m) through an equity issuance. Shareholders are set to vote on the matter October 6. The holdco for Grupo Luksic assets has been in an acquisitive mode of late, agreeing to buy fuel distributor Terpel Chile from Empresas Copec at the beginning of the month for $320m equivalent. It also will exercise its rights in $1.2bn equity raise for Chilean shipper Vapores, of which Luksic companies form part of a block holding 41%. Shares closed at CLP1,308.50 Tuesday.
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SMU Takes Supermercados del Sur
Chile’s Grupo SMU has agreed to acquire control of smaller peer Supermercados del Sur from private equity firm Southern Cross, paying with 433.3m in new shares worth CLP1305.trn ($266m). SMU, controlled by conglomerate Grupo Saieh, did not release additional numbers for the privately held supermarket operator, and did not respond to requests or comment. SMU bought 81.3% of Supermaercados del Sur in the deal , according to Dealogic data. The transaction could boost SMU to second rung in the sector, says a Santiago-based retail analyst. Supermercados del Sur was reported in April to be eyeing an IPO, as was SMU, operator of the Unimarc chain.