Chile’s Laboratorios Recalcine has launched an IPO, and plans to price May 4, according to a banker on the deal. The pharmacy will road show this week through April 29, and plans to offer 1.8bn primary shares and 336m secondary shares, in a deal that could reach $400m-equivalent. Proceeds are to be used for new acquisitions, as well as for refinancing debt and organic expansion. LarrainVial is managing the deal. Recalcine, which has a presence in 16 LatAm countries and is controlled by CEO Alejandro Weinstein, bought Argentina’s Northia in July for $25m, after buying 49% of UK-based Allergy Therapeutics for GBP22m in 2009.
Category: Chile
Posted inDaily Brief
Chile Expected to Hike Rate
Market consensus points to Chile’s central bank tightening its rate by 50bp to 4.50% today. Goldman Sachs says there is a small probability of a more moderate 25bp rate hike. “We expect the central bank to drive the policy rate to 5.50%-6.00% by end 2011. The rate hiking cycle is not expected to be more aggressive because core inflation is still well behaved,” it says. Morgan Stanley says a 50bp hike will reinforce the central bank’s anti-inflationary commitment.
Posted inDaily Brief
Factorline Set for Domestic Bonds
Chilean financial services company Factorline is expected to issue UF and CLP-denominated bonds today. The company plans a 5-year CLP10bn ($21m) tranche with a 5.0% coupon, according to a banker on the deal. A 7-year UF2.3m ($106m) tranche with a 3.5% coupon and 10-year UF2.3m tranche with a 3.8% coupon are also possible. The banker says it is likely only the 10-year will be issued, as the company prefers longer tenors for UF-denominated issues. Proceeds from the deal, rated A on a national scale, will be used to refinance debt and for working capital. Banco de Chile is managing the sale. In August, Factorline issued CLP20bn in 2015 local bonds through BBVA yielding 6.88%, or 129bp over the government benchmark.
Posted inDaily Brief
Luksic Increases Vapores Stake
Chile’s Grupo Luksic has acquired another 8.0% stake in local shipping company Cia. Sudamericana de Vapores (CSAV) for CLP350.5 per share, or about $120m equivalent, via its subsidiary Quinenco. With this transaction, Luksic increases its stake in CSAV to about 20%, the company says. A CSAV spokesman says that the deal was privately negotiated. CSAV’s shares soared 13.4% to CLP 397.5 after the sale was announced. Quinenco’s shares jumped 3.98% to close at CLP1,880.00. On March 23, Luksic acquired a 10% stake for about $120m equivalent. Besides the share acquisition, Luksic also said it plans to propose a $1bn capital increase for CSAV at a shareholder meeting to be held on April 8.
Posted inDaily Brief
Shell Sells Chile Assets to Luksic
Royal Dutch Shell agreed to sell $614m of its downstream assets in Chile to Grupo Luksic subsidiary Quinenco. The sale includes all of Shell’s retail, commercial fuels, bitumen and chemicals businesses, in addition to related supply and distribution infrastructure in Chile. Shell is understood not to have used any advisors. Quinenco is understood to have used Santander as an advisor. Quinenco did not return calls for comment.
Posted inDaily Brief
LatAm PE Investment Breaks Record
PE investment in LatAm reached a record $8.1bn in 2010, according to a report by LAVCA, a 122% increase over the year before. That compares to a 7% decline in US fundraising and a 32% decline in European fundraising, according to LAVCA. Southern Cross Group and Advent International closed the two largest LatAm funds at $1.68bn and $1.65bn, the association said. “We are seeing unprecedented interest from global investors looking to diversify their portfolio,” said Cate Ambrose, president and executive director of LAVCA. Brazil continues to dominate investment, capturing 76% of invested capital. “While newcomers are focused on Brazil, veterans of the region are targeting investments in other major markets where there is less competition, such as Mexico, Colombia, Peru and Argentina,” Ambrose said. “We also see some Brazilian firms positioning themselves as regional players instead of Brazil-only investors by expanding into other Latin American markets.” Both Chile and Colombia saw a significant increase in the number of deals and amount of capital committed to companies in each country. While growth financing and buyouts captured the largest share of deal capital (39% and 37% respectively), the amount of capital directed towards early stage investments grew by 54%, with the average deal size increasing at a healthy pace, from $1m in 2009 to $1.6m in 2010.
Posted inDaily Brief
Fitch Downgrades Chile’s La Polar
Chilean retail company La Polar has been downgraded by Fitch to A minus from A on a national scale with negative outlook. The downgrade reflects the deterioration in the retailer’s credit business and its negative impact on the company’s debt and credit profile. In 2010, Polar’s Ebitda fell 17%. Adjusted debt to Ebitdar reached 7.1x by the end of 2010, compared to 5.1x in 2009. The ratings agency expects continued deterioration in the company’s credit profile. This is partly as a result of the company’s international expansion plan. This could put pressure on cash flows, increase debt and decrease liquidity, says Fitch.
Posted inMagazine
André Esteves: The Humble Billionaire
André Esteves is deploying simple concepts and hard work to take BTG Pactual global. He inspires a new generation of homegrown financial entrepreneurs.
Posted inMagazine
Oops, They Did it Again
A hearty new equity issuance pipeline is building in LatAm, though, as at the beginning of 2010, friction between buyers and sellers threatened to poison the punch.
Posted inMagazine
M&A Sees More For Less
In the year through February 23, a total of 212 M&A deals worth $18.7 billion was reported, according to Dealogic.