Category: Chile

Chile’s Codelco has closed books on the sale of its 40% stake in power company E-CL, with the pricing set to be fixed this morning. The shares closed down 1.2% at CLP1,265.20 Thursday, which would imply a valuation of CLP536.4bn ($1.1bn) for the 424m shares state-owned miner Codelco holds. Investors and analysts expect strong demand for the asset, part of a set of planned privatizations included in the government’s earthquake reconstruction funding efforts. “There should be strong demand from local private and institutional investors and international investors, and they shouldn’t have a problem raising $1.1bn,” Tomas Gonzalez, equity analyst at Celfin tells LatinFinance. With plans for $1.5bn-$3.0bn in capex this year, it does not make sense for Codelco to hold on to its E-CL stake, he says, especially now that it has locked up a long-term power supply contract. France’s GDF Suez still holds a 52.4% stake in the power company, in addition to a 7.6% free float. Proceeds of the sale are marked for Codelco’s investment plans. LarrainVial and JPMorgan are managing the sale, which follows a 3-week roadshow.

SalfaCorp has announced a CLP122.5bn ($249m) capital raise. The structure of the raise will be decided at the Chilean construction and engineering firm’s next shareholder meeting.

Celfin Capital plans to raise a second Chile-focused real estate investment fund. The fund, Celfin Rentas Inmobiliarias II, expects to see commitments of $100m-$150m, with a first closing in April, Rafael Ariztia, investment manager at the Celfin’s asset management unit, tells LatinFinance. He expects to add about $200m-$240m in leverage to the fund. Fundraising has already begun and the Chilean firm is targeting high net worth individuals and insurance companies. The first fund, which closed in 2009, had about $100m in commitments and is carrying $140m in debt. Ariztia says that the first fund, Celfin Rentas Inmobiliarias, is about to make its last investment, but declined to identify the target. The two funds acquire and lease office and commercial real estate. He says that ideally, the new fund will provide returns equal to inflation plus 8%. Ariztia adds that the funds generate stable, recurring revenues. For example, a lease contract on a unit in an office or commercial building can go from a minimum of 2-5 years to up to 15-25 years. Ariztia says the average investment per project is around $60m-$80m, depending on the asset type. The funds invest in Santiago, where overall vacancy rates are around 3.5%. Demand for space is even higher in the city center, with vacancy rates of only 1.0%-1.5%. Celfin has about $295m AUM.

SalfaCorp has announced a CLP122.5bn ($249m) capital raise. The structure of the raise is to be decided at the Chilean construction and engineering firm’s next shareholder meeting.

Chilean holdco Rentas Libra is in talks to 45% of the voting rights, or about 232m shares, in Coca-Cola Embonor. Embonor, a local distributor of Coca-Cola and other beverages, is a subsidiary of Coca-Cola de Chile. The deal is valued at an estimated $923m equivalent including the assumption of debt, according to Dealogic. The acquisition would increase Rentas Libra’s stake in the company to 79%. For the 9 months to September 2010, Embonor reported CLP44.5bn in Ebitda, a 6.1% increase over the same period the previous year, according to company information. The companies were not available for comment.

Shareholders of Banco de Chile have approved a $500m capital increase to boost the balance sheet. The raise was first reported in December. The bank had proposed raising the funds by means of the issuance of cash shares that must be subscribed and paid at the price, term and other conditions agreed to at an extraordinary shareholders meeting.

Chile’s Supermercados del Sur has priced a UF2.5m ($153m) dual-tranche domestic bond issue. The retailer’s UF1.5m 4.10% of 2016 bond priced at 101.41 to yield 4.00%. A UF1m 2029 note meanwhile priced at 101.14 with a 4.70% coupon to yield 4.60%. Supermercados chose not to issue 7.20% of 2015 CLP-denominated bonds or 4.30% 2020 UF bonds, which were also options. LarrainVial led the sale, rated BBB+/A on a national scale.

Chilean power transmission company Transelec has sold UF7.0m ($282m) in 3 series of inflation-linked bonds in the domestic market, it says. A UF2.5m 2016 bond priced at 99.60 with a 3.65% coupon to yield 3.74%. A UF1.5m 2032 tranche priced at 97.90 with a 4.05% coupon to yield 4.20%. A UF3.0m 2039 portion priced at 95.33 with a 3.95% to yield 4.24%. The 5-year fell within expectations of a 3.5%-4.0% yield. The 21.5-year also fell within expectations of 4.0%-4.5%, according to expectations of Transelec’s finance manager prior to the sale. The 28-year came in under a 4.0%-4.5% estimate. The 28-year tranche achieved a lower cost than the 21.5-year because it is non-callable. Scotia and Corpbanca managed the sale, which raises funds for 2011 capex and to refinance debt due in April.

Chile’s Supermercados del Sur is expected to issue up to UF2.5m ($153m) in 4 tranches of local bonds today, according to a banker on the deal. The retailer is expected to offer a 4.10% 2015 UF-denominated piece, a 7.20% 2015 CLP-denominated portion, a 4.30% 2020 UF portion and a 4.70% 2028 UF piece. LarrainVial is leading the sale, rated BBB+/A on a national scale.

Montes del Plata, a joint venture between Finland’s Stora Enso and Chile’s Arauco, will build a $1.9bn pulp mill in Uruguay. The new mill is expected to produce 1.3m tons of pulp per year and be fully operational by the end of Q1 2013, Stora Enso says. Stora Enso and Arauco will each take a 50% stake in the mill. Around 40% of the project will be funded through equity, with the rest coming from loans raised by Montes Plata. Arauco is expected to fund its stake with proceeds from previous bond issues. Negotiations for the loans are taking place with regional and international banks, as well as multilaterals and Export Credit Agencies. Details of who will provide the loans, which could be either bilateral or syndicated, are expected in March.