Venezuela has decided to extend a 90-day period for talks with gold miner Rusoro as it decides how much to pay the company for its nationalized assets. The size and form of compensation remain unclear at this stage, but a person familiar with the situation tells LatinFinance that depending on the gold price used, the company values its assets at roughly $1bn. Rusoro and Venezuelan officials could not immediately be reached for comment. The parties have agreed so far to extend the talks to March 14 to decide on a way forward. So far discussions have revolved around the possibility of Rusoro selling all of its assets to the state with a second option of keeping a 45% stake in a new venture controlled by the government. Negotiations hinge on Venezuela’s decision to pay compensation based on unamortized book value for assets that Rusoro acquired gradually at fair market prices. Venezuela’s government passed a law in September to keep gold extraction in the hands of the state. As such, all mining companies must transfer assets to a new entity and accept a minority interest of as much as 45% of the new business, with the government in control. Rusoro is a mining vehicle founded by Vladimir Agapov and his son Andre, two Russian businessmen who spent years acquiring mining properties in Venezuela under the administration of President Hugo Chavez. In recent weeks Venezuela has moved to finalize compensation agreements with a number of companies affected by the president’s nationalization campaign.
Category: Regions
DF Brings MXP1.77bn 5-Year
Mexico City’s government has raised MXP1.77bn ($128m) through a sale of a domestic bond. The 5-year floating rate notes priced at TIIE+30bp, flat to talk and tight to quasi-sovereign CFE’s MXP1.358bn 4-year notes that came last week at TIIE+35bp. Deutsche Bank managed the sale, rated AAA on a national scale. This bond represents the sixth issuance under Mexico City mayor Marcelo Ebrard’s administration. Demand topped MXP2.5bn with participation coming from mutual funds, private banking, Afores, banks, and insurance companies. Proceeds will help fund public works. It last raised MXP2bn through a 2.1x oversubscribed dual-tranche re-opening in 2010. The MXP500m floating rate tranche paid TIIE flat, while the fixed-rate tranche for MXP1.5bn paid Mbonos+105bp The bonds have maturities of 4 years 8 months and 9 years 8 months, respectively.
Inbursa Sells Peso Paper
Mexico’s Banco Inbursa has sold a MXP3bn ($216m) floater in the domestic bond market. The 2-year notes priced at TIIE +20bp, in line with TIIE+15bp-25bp price talk. The bond was oversubscribed by 1.18x with participation seen mostly from mutual funds and bank treasuries. Proceeds will be used to increase liquidity and grow the bank’s credit portfolio. The bank is considering issuing an additional MXP2bn in 2-year floating rate paper in the domestic market next week. Banamex and Inbursa are managing the proposed new transaction, which is still pending authorization. On this occasion, HSBC and Inbursa led the transaction, rated AAA on a local scale. Inbursa last issued in July, pricing a MXP4.9bn 2014 bond at TIIE +20bp via Actinver, BAML, Inbursa and Santander.
Telmex to Delist from NYSE, NASDAQ and Latibex
Telmex has decided to delist its ADRs from the New York Stock Exchange and the Nasdaq stock market and its L shares from Spain’s Latibex market, in a reorganization that follows Telmex’s acquisition by America Movil. The telecom company’s shareholders approved the move, and it now plans to inform the various stock markets of its decision to pull the listing, which also involves terminating the ADR program in the US. Telmex shares, however, will continue to trade in the Bolsa Mexicana de Valores. With the Telmex acquisition by AMX, Mexican billionaire Carlos Slim has sought to unify his telecom assets under a single roof.
Saudi Dairy Buys Argentina’s Fondomont
Saudi dairy company Almarai has acquired Argentine farm operator Fondomonte for SAR13m ($83.19m), in a transaction that gives Almarani a source for animal feed. The Saudi company financed the transaction with a combination of operational cash flow and funds from Islamic banking facilities, the company says. Officials at Fondomonte could not comment on acquisition details and Almarai officials could not immediately be reached for comment. Fondomonte controls three farms with an combined extension of 12,306 hectares where it produces soybean and corn.
Banco de Bogota Closes $500m Loan
Banco de Bogota has closed a $500m 3-year bullet facility, bringing on board a total of 12 banks and wrapping up a take-out for a bridge used to finance the acquisition of Central America’s BAC-Credomatic. Coming late in the year and at a time when European banks are retrenching, the transaction perhaps moved slower than initially expected, but leads Citi, HSBC and JPMorgan eventually brought in an eclectic group of 9 banks. Banco de Credito del Peru, Commercebank, Bank of Tokyo, Wells Fargo and Standard Chartered participated as MLAs, while Helm Bank, Corpbanca, Mercantil Commercebank and the Israel Discount Bank signed up as managers. The loan pays a margin of Libor plus 225bp, and fees ranged between 35bp to 100bp.
Mexichem Still Pursuing Dutch Pipemaker
Mexican chemical company Mexichem intends to continue its pursuit of Dutch pipemaker company Wavin, just days after the target rejected an improved acquisition offer. Mexichem plans to request an approval from Dutch regulatory authorities for its non-binding offer for Wavin sometime during the coming four weeks. On December 6, Mexichem improved an unsolicited offer for Wavin by offering EUR9 in cash per ordinary share or an implied EV/Ebitda multiple of 7.5x. The company first approached Wavin in late November with an offer of EUR8.5 per ordinary share. Wavin officials have rejected both offers, arguing the company is worth far more.
Isolux Wraps up BRL Bond
The Brazilian unit of Spain’s Isolux has completed a BRL140m ($76m) domestic bond transaction, according to Anbima. Isolux Energia e Participacoes will pay the DI+5.35% on the 2019 bond, amortizing twice a year beginning in 2013. Banco Votorantim managed the deal, done under the rule 476 restricted format. The Spanish renewable specialist plans to IPO its unit in Brazil – the recently anointed headquarters of its EM –wide operations – in 2012.
Homex Lowered by S&P
Mexican homebuilder Desarrolladora Homex has seen its ratings lowered by S&P, to B+ from BB minus. S&P cites Homex’s performance as “below our expectations, on greater leverage, negative free operating cash flow, higher short-term debt, and tight covenant headroom.” It expects the builder to need additional external funding, to cover for the negative cashlfow and still make expected capital investments. The outlook is stable.
Inbursa Eyes Second Local Bond
Mexico’s Banco Inbursa is considering issuing an additional MXP2bn ($145m) in 2-year floating-rate notes in the domestic market next week, in addition to the MXP3bn sale scheduled for today. “The dates are close, so if we don’t issue the new bonds [next week] we will postpone that issuance until 2012,” notes a banker on the deal. Banamex and Inbursa are managing the proposed new transaction which is still pending authorization. Price talk on today’s MXP3bn 2-year issuance is between TIIE+15bp-25bp and is a good starting point for price talk on the second transaction, the banker says. Proceeds will be used to fund bank operations. HSBC and Inbursa are leading today’s transaction, rated AAA on a local scale. Inbursa last issued in July, pricing a MXP4.9bn 2014 bond at TIIE +20bp via Actinver, BAML, Inbursa and Santander.