Bioenergy IPO to Test Markets

Brazil’s Louis Dreyfus Commodities has launched an IPO for its Biosev unit, targeting BRL782m-BRL971m ($389m-$483m), according to regulatory documents. The sugar, ethanol and bioenergy unit, also known as LDC Bioenergia, plans to price 41.2m primary shares July 18 at BRL16.50-BRL20.50 each, meaning an BRL877m size if done at the midpoint and a 15% greenshoe is used. A 20% hot issue is also available. Biosev is raising funds for its expansion plan and to repay debt. The issuer has 13 plants in operation, with 40m tons of processing capacity and 1,000 megawatts electric generation capacity, and plans to grow in the areas of sugar and ethanol production and energy generation. Bradesco and JPMorgan are global coordinators on the sale, and Banco do Brasil, Banco Votorantim, Itau and Santander are bookrunners. Starting operations in 2000, the issuer has grown through acquisitions, most recently that of Santelisa Vale in 2009. The Biosev sale is the first Brazilian IPO to launch out of the seven anticipating a July pricing, with others – including Taesa, CPFL Renovaveis and Pague Menos – needing to decide soon if they will test rough conditions. Bankers expect most to postpone.