Canadian base and precious metals miner Dia Bras says it has signed a binding agreement to acquire 82% of Peru-based silver, copper and lead miner Minera Corona for $285.5m. Dia Bras will finance the acquisition with a $150.0m bridge loan from Citi and a non-brokered private placement of up to 58.4m subscription receipts to be issued at CAD2.86 each, or a total of CAD167.0m. Each subscription receipt will entitle the holder to receive 1 Dia Bras share. The deal, which represents Dia Bras’ first foray into Peru, is expected to close by June. The company’s operations are all in Mexico. Citi is advising Dia Bras. The companies were not immediately available for comment.
Category: Peru
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LatAm Equity Outflows Gain Steam
LatAm equity fund outflows gained steam for the week ended March 2, according to EPFR Global, losing $203m for the week. While this was an increase on the $179m of outflows during the previous week, it is an improvement from outflows of between $300m and $400m seen 3 to 4 weeks ago, according to analysts at EPFR. Brazil equity funds saw its seventh consecutive week of outflows, according to EPFR, losing $140m. All the BRIC countries are being impacted by higher food, energy and commodities prices, EPFR adds. However, Peru equity funds stood out among the LatAm countries with inflows of $18.5m, while Mexico also had inflows of $15m. With regard to performance, LatAm funds were up 3.72% for the week to March 3. They are down 2.98% year-to-date. Meanwhile, EM funds are up 3.75% in the week and down 2.67% ytd and global small and mid-cap funds are up 3.11% in the week and up 2.72% ytd.
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Project Finance Loans Miss Expectations
Structured finance bankers say that while they had expected infrastructure projects to require project finance loans this year, no new loans are close to being launched. The dearth of proposals has bankers worried the project finance market could be heading into a dry period in the next few months. “The last 2 months provide a very gloomy forecast as there is some pitching going on, but nothing else in the project finance space,” says one syndicated loans banker, who adds that even activity in the corporate loans space is spotty. Vale has appointed bookrunners for a $3bn syndicated loan, while America Movil is looking at proposals for a $4bn loan and Gerdau has put out an RFP for a $1bn loan. “A lot of corporates are well financed, so there are not many deals, and any deals that do come to the market will be able to price tightly as there is not much volume and banks are hungry to use their balance sheet,” says one head of syndicated loans. Market participants add that while some banks will look to lead deals, despite tight pricing, it will be very difficult for banks to participate at a retail level, particularly for European banks seeing higher costs as a result of the sovereign debt crisis. The last project finance loan, a $250m A/B loan from the IFC to fund the 168MW Cheves hydropower plant in Peru, came in December.
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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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Peru Selling Stake in Distriluz
The government of Peru plans to sell between 10%-30% of state-owned power transmission company Distriluz via an IPO on the local stock exchange, sources knowledgeable of the deal tell LatinFinance. The government has hired Celfin and Bancolombia, local consulting firm Macroconsult and local law firm Rossello Abogados to advise on the sale, but a timeline has not been established. A Peru-based banker doubts that international strategics or private equity players will be interested since only a minority stake is to be sold. Distriluz owns 4 subsidiaries: Electronorte, Electronoroeste, Hidrandina and Electrocentro. Distriluz’s subsidiaries reported combined revenues of PES800m ($288m) in 2009.
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Peruvian Port Operator Gets $85m Loan
Andino Investment Holding, a Peruvian port logistics, port agency and warehouse operator, has received a loan for $85m from Goldman Sachs. The use of proceeds is to repay debt and increase its stakes in its operating subsidiaries.
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Peru Rate up 25bp
As expected, Peru’s central bank decided to tighten its rate by 25bp to 3.50%. It says the hike is a preventive measure in an environment of rising inflation internationally to avoid adverse effects on local demand. Barclays expects more hikes in the next few months, bringing the rate to 5.50% by October. Celfin, which also expected a hike, says consumer prices rose at the fastest pace in 27 months in January and may accelerate beyond 3% this year for the first time since 2009 as international prices of food and crude oil climb.
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Rio Alto Acquires Peru Mine
Canadian miner Rio Alto Mining says it has exercised an option to acquire the La Arena fold oxide project in Peru from peer Iamgold for CAD49m in cash. A Rio Alto spokeswoman says the cash comes from a private placement completed on January 20, in which it issued 28.00m common shares at a price of CAD2.05 per share, raising CAD57.50m. The shares were sold by a syndicate of underwriters led by GMP Securities and including Scotia, Clarus Securities and Stonecap Securities. In 2009, Iamgold entered into an option and earn-in arrangement with Rio Alto on the La Arena property. La Arena is expected to begin production in the second quarter of this year. Under the agreement, Rio Alto had an option to acquire 100% of Iamgold’s interest in the property. Iamgold, also based in Canada, says it will use the proceeds to strengthen its financial position and finance the development of its core assets.
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Peru Gets CAF Loan
The government of Peru has signed a contract with CAF for an 18-year loan with a 5-year grace period for up to $150m, according to a release by Peru’s Ministry of Economics and Finance. The interest on the loan will be Libor plus 2.4%. The loan will finance irrigation infrastructure needed to bring 38,500 hectares into agricultural production in the Las Pampas de Majes – Siguas region. The first phase of the project involves work relating to the Angostura dam and the Angostura-Colca bypass, as well as some repairs. The first phase will cost $207.7m, to be financed by the loan and by the regional government of Arequipa. The second phase will consist of the construction of the Lluclla-Siguas bypass which will cost $217.28m. The second phase will be financed by the concessionaire.
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Teva Selling BTL Peru
Israel-based pharmaceutical company Teva is selling Peruvian pharmacy chain Botica Torres de Limatambo (BTL), say investment bankers off the deal. Ivax, which Teva acquired in 2006, had purchased BTL in June 2004 from Peru’s ASSA Investments for about $10m, according to SEC filings. A banker in Peru says BTL has grown significantly since then and is now among the top 5 pharmacy chains in the country, with a market share of about 10%. Peru’s pharmacy market is around $1.1bn in size. Another banker off the deal says Interbank, which recently acquired Inkafarma, is a potential buyer. “If Interbank were to merge BTL with Inkafarma it could end up with a 40% market share,” he says, adding that Teva is not using any financial advisors. A Teva spokeswoman says the company does not comment on market rumors. The news comes a day after Teva announced it was acquiring Peruvian drugmaker and marketer Infarmasa for an undisclosed price from private equity firms Altra Investments and The Rohatyn Group. The latter are said to have achieved a return on investment of over 30%.