Perenco Postpones Brazil IPO

Brazil’s Perenco e Gas do Brasil Participacoes postponed its IPO Friday, becoming the third LatAm issuer to pull a deal in what was a brutal week for the region’s equity markets. The Brazilian unit of UK-based oil exploration company Perenco, which cited market conditions for the decision not to move forward, had planned to sell 0.4m primary shares at BRL1,550-BRL2,000. That would have meant a BRL829m ($533m) sale if it had come at the BRL1,775 midpoint and a 15% greenshoe had been included. Investors cited the company’s dearth of producing assets as one of the main reasons why they lost interest in the offering. A busy week for equities, with follow-ons from Mahle, Kroton and BR Properties, had created a buyers’ market for LatAm investors, who were able to call the shots on pricing, an investor says. Mexican low-cost airline Interjet and Brazilian sugar and ethanol cooperative Copersucar also announced last week that they would be pulling or postponing their offerings after seeing Qualicorp miss the bottom of its IPO range by almost 19%, and Technos scraped the bottom of its pricing targets. Perenco, which operates in 16 countries worldwide, had planned to use the funds to develop its 5 blocks in the Espirito Santo Basin and acquire additional blocks. About a third of the raise was slated for acquisitions, including new government auctions. BTG, Itau and Morgan Stanley were leads.