Cencosud Pleased with NY Debut: Paulmann

The pricing of Cencosud’s $546m equity sale was in line with the company’s expectations, its top officials say, as the Chilean supermarket operator debuts its shares in New York and raises funds for expansion. “To have 6x demand for the offer is extraordinary, especially on a day when the US market fell 250 points” founder and chairman Horst Paulmann tells LatinFinance. “Leaving 6%-7% on the table wasn’t a mistake – quite the contrary. It was in line with our philosophy of live and share,” he adds, noting that as in the retail business, the most important thing isn’t always the lowest price, but rather price with quality. The retailer sold 45.5m shares in Santiago at CLP2,600 ($5.17) each, and 59.5m shares in the form of ADS at $15.61 each, including an overallotment option. The 2,600 price represents a 7% discount to the previous CLP2,795.9 closing price, and did not meet a CLP2,730.3 minimum the issuer had previously indicated. Total demand was CLP1.57trn, with CLP1.08trn in competitive demand. About 47% of the sale went to long-only ADR buyers, with 22% to domestic pensions, 8% to domestic retail, 7% to other local investors, 6% to non-ADR buying foreigners, and the remainder to other investors, the company says. Cencosud is raising funds to pay down debt and to fund the acquisition of Jumbo Retail Argentina, in addition to general corporate purposes. “This will give us the flexibility to grow in the next years. We are very comfortable with the capital increase,” CEO Daniel Rodriguez tells LatinFinance. With no large maturities in the next three years and last year’s $750m international bond under its belt, Rodriguez does not expect new fundraising of any kind in the near future, as the retailer turns its focus to organic expansion. “We see Brazil as a great market. Brazil in the last 4 years in the supermarkets segment has become our biggest operation, and we think in the next 3 years it will offer much opportunity. Our focus will be on organic growth in super