Brazil Real Estate Targets Equity Follow-Ons

Brazilian homebuilder Direcional Engenharia and real estate broker Brasil Brokers have each set targets for follow-on equity offerings. Direcional estimates it will raise BRL370m, based on plans to sell 20.8m primary and 7.2m secondary shares at a BRL13.20 reference price. Shares closed at BRL13.10 Thursday. The builder is set to begin investor meetings January 21, with pricing scheduled for February 8. A 15% greenshoe and 20% hot issue are also possible. Ricardo and Ana Lucia Gontijo are the selling shareholders in the secondary portion. Direcional wants to raise funds for expansion and boost liquidity in its shares after a November 2009 IPO raised just BRL274m. Itau is leading the deal, joined by BAML, BTG and Santander. Brasil Brokers meanwhile plans to raise BRL200m by selling 21.8m shares at a BRL9.16 reference price. It closed at BRL9.43 Thursday. The issuer plans to start a roadshow January 26, and price February 3. A 15% greenshoe and 20% hot issue is also possible. Credit Suisse is lead manager, with Morgan Stanley and HSBC as bookrunners. Brasil Brokers went public in 2007. The real estate sector seems set for a busy quarter in the equity markets, as developer Tecnisa is also preparing to raise around BRL380 in a February 2 follow-on.