Chile’s central bank decided to keep the country’s benchmark interest rate at 5.25% for the second straight month, in line with market expectations. In a statement, the bank notes a decline in global inflation expectations as developed world economies slow. With inflation hovering around a 3% target, analysts expect the bank to keep rates on hold for the remainder of the year.
Category: Chile
Posted inDaily Brief
Sigdo Koppers to Offload White Goods Unit
Chilean conglomerate Sigdo Koppers is negotiating the sale of Compania Tecno Industrial (CTI), its home-goods manufacturing unit. Sigdo says it is close to a sale of its 50.1% stake to a major undisclosed international buyer, and local reports are naming Sweden’s Eletrolux as a likely candidate. The value of such a deal, which would include Somela in Chile and Frimetal in Argentina, is seen at more than $600m. TCI shares closed at CLP33.00 Thursday, with Sigdo Koppers shares closing at CLP815.30.
Posted inDaily Brief
La Polar Taps Lazard
Chilean retailer Empresas La Polar has hired Lazard to assist in restructuring the company. Lazard will assist with debt issues, investments and striking legal agreement with existing bondholders. A deal with bondholders is seen as central to the company proceeding with a $220m capital increase needed to straighten finances. In June, La Polar disclosed it overcharged clients for past-due store credit card bills and was setting aside nearly $1bn in loan-loss provisions.
Posted inDaily Brief
Itau Chile Places Local Bond
Itau Chile has sold UF1m ($47m) in domestic bonds. The 2031 notes with a 13.8-year average life priced at 103.63 with a 4.0% coupon to yield 3.73%. Itau managed the sale, rated AA/AA minus on a national scale. The sale is the second off a program from which Itau can issue periodically, and follows an identical UF1m sale last week which secured an identical coupon and yield.
Posted inDaily Brief
Chilean Pharmaceutical Maker Plans Bonds
Laboratorios Andromaco has filed a shelf to sell domestic bonds in Chile. The maker of dermatological and other pharmaceutical products will be able to issue off a UF2m program with tenors of up to 10 years and off a UF2m program with maturities of up to 30 years. It does not name a lead manager. Proceeds are marked for investments, working capital and debt refinancing.
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Shell Seen Shedding $1bn-plus of Argentine Assets
A sale of Shell’s downstream Argentine assets could fetch more than $1bn and would be in line with the company’s regional strategy, market sources say. The Quineco unit of Chile’s Luksic group is rumored to be close to signing a deal to buy Shell’s 700 service stations, Dock Sud refinery and the Barracas lubricant plant, in what would be a follow-up to its purchase agreed in May to buy Shell’s Chilean downstream assets for $614m. Shell has been wanting to exit Argentina for some time, but had found it difficult under former president Nestor Kirchner’s administration, who opposed any sale to a foreign buyer, says a banker, noting the value of the deal should be more than $1bn. Such government opposition may have weakened since Kirchner’s death, paving the way for Luksic. A government go-ahead is said to be part of the negotiations happening this week, according to local press. “Shell is streamlining its portfolio of assets in the region,” says an oil sector analyst, who notes Shell’s business in Argentina represents about 15% market share. A Shell Argentina official declined to comment, and a Quineco official did not return a request for comment.
Posted inDaily Brief
AES Gener Hits 60% in Tender
Chilean utility AES Gener has received acceptance from 63.2% of holders of its 2014 bonds targeted in an exchange offer that expired Thursday. Holders of $151m in the 7.50% 2014 bonds agreed to sell the bonds back for cash, and holders of $102m agreed to exchange the bonds for new 5.25% 2021 bonds. In the offer launched July 16, creditors were offered new bonds plus $150 in cash per $1,000 principal of existing bonds if they had tendered prior to July 27, and new bonds plus $110 thereafter. Investors choosing cash got $1,130 per $1,000, and only had until July 27. AES Gener also sold $400m of the 10-year notes at a 5.375% yield. Close to $300m of that took the form of new money. Citi and Deutsche Bank acted as dealer managers and led the new bond sale.
Posted inDaily Brief
Ingevec to Hold off on IPO
Chilean construction and engineering company Ingevec has postponed its IPO, which had been scheduled for August 23. The sale of 29% of Ingevec, on the road since the beginning of the month, will wait “until the volatility currently seen in domestic and international markets stabilizes,” the company says. The issuer is looking for about $30m–equivalent to fund expansion projects. LarrainVial had been managing the sale.
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Sonda Launches Takeover of Rival
Chilean IT firm Sonda has launched a public takeover offer for the shares of rival Quintec. The purchase would reach CLP32trn ($69m) if Sonda gets 100% acceptance, at the CLP206 price it is offering. A group of Quintec shareholders representing a 37.3% position has already agreed to sell, Sonda says. Sonda is in the middle of an aggressive $500m expansion plan, and adding Quintec would increase its domestic presence as well as in Argentina, Brazil, Colombia and Peru. The CLP206 offer price represents a 47% premium to Tuesday’s CLP140 close, though Quintec shares are extremely illiquid. Quintec closed Wednesday at CLP199.
Posted inDaily Brief
SMU Advances IPO
Chilean retail holdco SMU has filed for an IPO, according to a banker managing the deal, aiming to price as soon as October. The portion of the company to be floated and the exact size and timing has not been determined, but the retailer is thought to be offering 18%, which could raise more than $200m equivalent. Celfin and Santander have been hired to manage the sale. SMU, which is owned by local businessman Alvaro Saieh, controls supermarket chain Unimarc, along with home improvement and convenience store chains.