Fiat says it plans to invest BRL10bn in its Brazil operations over the next 5 years. According to representatives from Fiat, the Italian car manufacturer plans to invest in product, technology, R&D and production capacity expansion. According to Anfavea, the Brazilian association of automobile manufactures, Fiat is the second-largest maker of automobiles in the country, after Volkswagen do Brasil.
Category: Regions
Posted inDaily Brief
Ignia Fund Gets 50% of Barafon
Mexico-based VC fund Ignia is investing MXP38.1m ($3.1m) in Barafon, a provider of public telephony and related services to low-income customers. With the investment, the fund gains a 50% stake in the company, says an Ignia spokesperson. She also says that the payment will be done in 3 installments, 1 per year until 2012. “With funding from Ignia we will rapidly expand our network of micro-businesses, while developing additional products and services that are economically and socially beneficial to the base of the socioeconomic pyramid,” says Jose Gonzalez, CEO and founder of Barafon, in a statement. Barafon has over 600 phone booths throughout 4 Mexican states.
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OHL Lays Out Mexico IPO Terms
OHL aims to raise MXP15bn from an IPO spinning off 30%-35% of its Concesiones Mexico unit. The Spanish builder plans to sell up to 552.3m units, including a 15% greenshoe, or 480.3m shares without, according to regulatory documents. The sale would raise MXP14.9bn with the greenshoe or MXP13.0bn without, if priced at the MXP27 midpoint of the MXP24-MXP30 range. The issuer expects to price between November 4 and November 11. It should see 35%-40% placed in Mexico and the rest internationally. Of the 552.3m share total, 116.2m would come from a secondary issue. BBVA and Santander are managing the Mexican portion, with Credit Suisse, Santander and UBS handling the international side. OHL is building, and wholly owns, the Bicentenario elevated Mexico City toll road, Libramiento Norte de Puebla road, and latter phases of the Circuito Exterior Mexiquense road. It also operates the Circuito Exterior Mexiquense Phase I road, Carretera Amozoc-Perote road and Toluca International Airport, of which it owns 87%, 55% and 33%, respectively.
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Panama City Gets CAF Financing
Multilateral CAF says it has approved a $120m loan for Panama’s ministry of finance and economy to improve sanitary conditions in Panama City. Terms were not disclosed and CAF officials could not be reached for comment.
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Banco Popular to Issue Bonds
Colombia’s Banco Popular, part of Grupo Aval, says it plans to issue COP200bn ($111m) in local bonds with the possibility of increasing the amount by another COP100m depending on demand. The issue will have 4 pieces. Tranches due in 18, 24 and 36 months will be pegged to IBR and a 3-year piece will be pegged to IPC. Proceeds will be used for working capital. The notes are rated AAA and the bank will lead the sale itself.
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Correction: PDVSA Launches Bond Sale, Swap
An October 19 daily brief entitled “PDVSA Launches Bond Sale, Swap” incorrectly states the coupon on a bond and the exchange price offered to holders. It is a 0% 2011 bond, and holders will receive $1,095 per $1,000 if participating after the October 28 early acceptance date.
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Colombia Re-Assigns Spending
Spending plans of Colombia’s new government will remain broadly in line with the previous government’s, though some spending will be re-assigned and increased, German Arce, director of public credit and the national treasury tells LatinFinance. “We will re-assign around $1.5bn equivalent towards housing, infrastructure, agriculture, and science and technology education,” says Arce. He adds that the government will raise a further $2bn equivalent to go towards these sectors in 2011 and that this will largely be funded in the domestic capital markets. Arce adds that the government would not sell off strategic assets to fund projects, such as those relating to the oil sector but says some non-strategic assets, such has some small electrical plants could be sold off. Funding plans for 2011 include a dollar benchmark, and Colombia could also look to tap the Asian markets and look for investment from the Middle East. Patricia Morena, subdirector of external financing added.
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Findeter to Issue Credit Deposit Notes
Colombian state-owned development finance agency Findeter is planning to issue COP250bn ($138m) in credit deposit notes via a Dutch auction. The issuance could be doubled if demand is strong enough, Findeter says. The AAA rated issue will be done in 4 tranches. An 18-month piece will pay a spread over IBR, a 2-year tranche will pay a spread over DTF and 3-year and 5-year pieces will pay a spread over IPC. Proceeds will be used to finance lending. The agency is structuring and managing the operation itself.
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Singapore SWF Buys Into Odebrecht
Brazil’s Odebrecht Oil and Gas (OOG) says Temasek, Singapore’s $133bn sovereign wealth fund, has invested $400m in the company. According to Odebrecht, the investment will allow Temasek to expand its footprint in LatAm, including Brazil, as well as Angola. The SWF will take a minority stake and Marcelo Odebrecht will remain chairman of the new company board. “There is a strong identity between the business cultures of Temasek and Odebrecht,” says Miguel Gradin, president of OOG. “This long-term partnership is consistent with the OOG’s growth strategy as it increases the company’s financial strength and contributes to better serve our clients in Brazil and worldwide, including demands related to exploration, development and production in pre-salt.” Odebrecht adds that it is planning to invest $3.5bn over the next 3 years.
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IXE And Banorte Announce Engagement
Mexican banks IXE Grupo Financiero and Grupo Financiero Banorte say they have reached a non-binding agreement to consider a merger. According to IXE, the 2 financial groups have significant synergies, with the combined institution becoming the third largest in the country by either assets or deposits, and the only bank of its size controlled by Mexican shareholders. A combination of the 2 could help fend off an acquisition by a larger foreign competitor, according to a Mexico-based banker, while IXE’s retail operation can give Banorte greater presence in DF and the southeast. Details of the merger are not disclosed, but bankers say IXE is unlikely to sell for less than 2x book. JPMorgan is rumored to be advising IXE, but declines comment. JPMorgan advised IXE on its bancassurance alliance with RSA Mexico earlier this year.