Infrastructure IPOs Seen Giving Brazil a Boost

Infrastructure companies will send Brazil IPO volume to a record level in 2008, Pedro Guimarães, a director at UBS Pactual in Brazil, tells LatinFinance. “These are companies whose revenues equal billions of dollars,” Guimarães says. “Each infrastructure IPO will equal that of 20 smaller companies,” he adds. Firms in sectors such as oil, petrochemicals, construction, heavy transportation and electric energy needing long-term funding will be responsible for surging IPO levels next year, he remarks. Large construction names in Brazil include Odebrecht and Camago Correa. Guimarães adds: “To make up for all this demand for infrastructure from the government and private companies, constructors will have to tap the equity or debt markets. That’s for sure.” Primary and secondary stock offerings in Brazil have totaled BRL40.73bn thus far in 2007, up from BRL26.98bn in the whole of 2006, according to CVM. Another trend due in Brazil is additional offerings from companies whose IPOs took place in 2006 and 2007, as they seek to grow and buy other firms.