Brazil airline TAM says in a regulatory file that local civil aviation agency ANAC has authorized the merger with Chilean airline LAN. TAM’s shares closed 0.8% higher at BRL35.69 after the announcement. LAN’s shares closed at CLP13,137, up 2.4%.
Category: Chile
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Bancolombia and Bank of Tokyo Sign Agreement
Bancolombia and Bank of Tokyo Mitsubishi UFJ on Wednesday signed a cooperation agreement to increase the relationship between the two banks, in order to promote business between LatAm and Asia. The agreement will enable Bancolombia to assist clients looking for Asian investors for projects in Colombia and the rest of LatAm, offer clients financing for overseas business and help them obtain financing from export credit agencies. “We are interested in increasing our services to the most important market, which is the Asian market,” says Jaime Velasquez, vice president of finance at Bancolombia. The release added that there is interest from a lot of Asian sectors to invest in Colombia, especially in infrastructure projects.
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Chile Pharma IPO Seen H1
Chile’s Laboratorios Recalcine is expected to begin roadshowing an IPO near the end of March or at the beginning of April, according to a source close to the matter. This would likely put the IPO in April or May. Recalcine, which filed initial papers for the deal in January, is expected to raise at least a $200m-equivalent minimum. Proceeds are to be used for new acquisitions. 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. LarrainVial is managing the deal. Fishery AcquaChile is another which has indicated its IPO intentions, with a deal through IMTrust expected in the second half of the year.
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Concha y Toro Buying US Winery
Chilean winemaker Vina Concha y Toro says it is acquiring California’s Fetzer Vineyards and related assets from Brown-Forman, the company that produces Jack Daniels whiskey, for $238m. A Concha y Toro spokesman tells LatinFinance that to finance the deal, the company has obtained a $125m bridge loan from Deutsche Bank maturing 6 months after the deal closes in April. He does not disclose pricing of the loan. The company will likely issue a bond of no more than $200m to refinance the loan and for working capital. “We still don’t know where we will issue the bond or in what currency,” he says. The buyer will also use cash on hand and existing credit lines, the spokesman adds. Celfin says the price paid implies a multiple of 1.5x sales and 7.6x Ebitda. “We see the deal as a substantial move toward internationalization for Concha y Toro, taking a significant step into the US market,” Celfin says, adding that Fetzer is the eighth largest player in the US wine market. BCI Estudios says the deal is in line with Concha y Toro’s internationalization plans by expanding its presence in key markets and reaffirms the positive perspectives for the company. The acquisition includes 6 wine brands, 429 hectares of owned and leased vineyards in Mendocino County, California, cellars with capacity for 36m liters, 6m liters of inventories, and a bottling plant. Deutsche Bank acted as Concha y Toro’s financial advisor while Rabo Securities and Rothschild advised Brown-Forman, according to the Concha y Toro spokesman.
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Parque Arauco Plans Share Sale
Chilean commercial property developer Parque Arauco is planning to raise COP110bn ($230m) through the sale of new shares, it says. The company will put the matter to a shareholder vote April 7. Proceeds would help fund Parque Arauco’s expansion in Chile and in Colombia and Peru. Arauco’s shares closed at CLP939.55 Wednesday, giving it a market cap of CLP573bn.
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TAM Upbeat after ANAC Meeting
Brazilian airliner TAM says in a regulatory note that a meeting with the local civil aviation authority, ANAC, regarding the merger with Chilean peer LAN had a positive outcome. ANAC should announce its final decision regarding the merger shortly, TAM says. TAM’s stock price closed up 1.43% at BRL35.40 per share on the news.
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Codelco Sells Unit Stake
Chilean state-run copper miner says it is selling a 66.0% stake of its Inca de Oro gold and copper project to Australian mining company PanAust for $55.3m in cash after receiving approval by presidential decree to do so. Codelco is retaining the remaining 34%. PanAust has also agreed to pay a net smelter return royalty to Codelco from revenues generated by the project. The royalty was capped at $30m. Codelco says a prefeasibility study shows that the Inca de Oro mine could produce about 50,000 tons of copper and 40,000 ounces of gold per year. Codelco executives were not available for comment.
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Chile Tightens Rate As Expected
Chile’s central bank has tightened its rate by 25bp, as expected by market consensus, bringing the rate to 3.50%. According to the central bank, international prices of commodities, especially food, are rising, and actual and expected inflation have increased globally. JPMorgan, which agreed with consensus, expected the tightening due to upside risks to inflation. Morgan Stanley also saw a 25bp hike, saying that inflation expectations have deteriorated since the last policy meeting. The central bank’s target for inflation is 3.0%. Annual inflation for January stood at 2.7%.
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Chile Rates Seen Up 25bp
Market consensus points to Chile’s central bank tightening its rate by 25bp to 3.50%. Celfin, which agrees with consensus, says that inflation currently stands at 2.7%. “Keep in mind the central bank’s mandate is to keep inflation between 2.0%-4.0% annually,” Celfin says. Morgan Stanley also agrees with a 25bp hike, saying that inflation expectations have deteriorated since the last policy meeting.
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Santander sells 1.9% of Chile Unit
Spanish bank Santander has sold a 1.9% stake in its Chilean unit via the local exchange, raising $290m, according to a stock exchange statement. One banker says that Santander sold the shares at CLP38.25 each to local institutional investors. Another banker says Santander Investments was in charge of the auction.