Cencosud Lowers Equity Expectation

Chile’s Cencosud has reduced the size of its planned New York equity sale, to about $590m, from about $720m, it says. The retailer now expects to sell 91.3m shares, in the form of ADS, down from 125m it was targeting in filings last month. A 15% greenshoe would bring the total to 105m, raising $591m at Friday’s closing price. The exact date has not been set, though it is expected in the next few weeks if market conditions permit. ECM bankers see a stiff challenge for issuers to get equity deals out ahead of the traditional July-August vacation period, with only follow-ons and large, liquid IPOs likely to get done. The supermarket operator is raising funds to pay down debt, and to fund the acquisition of Jumbo Retail Argentina, in addition to general corporate purposes. Each ADS would be worth 3 common shares, and initially referenced by ADRs. Credit Suisse, JPMorgan, Morgan Stanley, UBS, Santander and BBVA are managing the deal, done as part of a $2bn total capital increase approved last year. Cencosud has operations in Chile, Colombia, Peru, Argentina and Brazil. Its common shares closed at CLP2,849 ($5.63) Friday.