Fibria Set for Follow-on

Brazil’s Fibria is scheduled to price today a follow-on equity sale that could raise close to BRL1.3bn ($690m). The pulp and paper producer is raising funds for repaying debt and general purposes, in the latest chapter in a multiyear deleveraging story. The 86m primary shares, assuming a 15% greenshoe, would raise BRL1.29bn if done at Monday’s BRL15.00 closing price. “This is a very over-levered company, but it shouldn’t be difficult for them to raise the funds,” says a New York-based equity investor, noting that the anchor of Grupo Votorantim and BNDESPar exercising their rights should account for the bulk of the deal. Votorantim and BNDESPar are to maintain their postions of 30% each in the sale, according to the prospectus. The transaction is to be the first offering under the Fibria name, though both Votorantim Celulose e Papel and Aracruz – the companies that merged to form FIbria – were longtime Bovespa members. Itau and Bank of America Merrill Lynch are global coordinators, with Banco do Brasil, BTG Pactual, Deutsche Bank and Santander as bookrunners.