Vinci Offers Boost to PDG

Brazilian private equity firm Vinci Partners has offered to raise up to BRL800m ($404m) for PDG Realty, PDG says, to help shore up the homebuilder’s balance sheet as it faces cost overruns, project delays and increasing debt levels. Under the proposal, Vinci would raise BRL800m through the sale of warrants entitling each holder to one new share and one convertible debenture, at BRL4.02 each. This represents an 11.4% premium to Friday’s closing share price, Vinci says. The shares closed at BRL3.78 Monday. The debentures acquired under the plan could be converted after 4 years into one additional new share at a minimum of BRL6.00 per share. Vinci would contribute between 54.8% and 81.4% of the fresh capital under the plan and refrain from trading the new shares it acquired for 2 years. The firm says the preemptive rights of existing shareholders to subscribe to the transaction would be respected. PDG’s net debt was BRL5.1bn at the end of March, versus BRL3.2bn a year earlier.