Mixed Results Seen for IPOs

The fate of an IPO for Brazil’s Biosev remained uncertain late Wednesday night, while fellow Brazilian Transmissora Alianca de Energia Eletrica (Taesa) and Mexican Vesta were seeing strong demand for their offerings scheduled to price today, according to people following the sales. Biosev, the sugar, ethanol and bioenergy unit of Louis Dreyfus Commodities, was seeking to raise more than BRL700m ($345m), but had not priced as of late Wednesday night. The deal counted on an approximately 40% participation from its controlling shareholders, but was still needing to get the additional orders needed to reach its target, according to people following the sale. The lead managers declined to comment or were not available for comment on the status of the deal. More information was expected today. Despite any issues with valuation, the issuer is seen as a strong, diversified player likely to emerge as a consolidator in what is a very fragmented sector. Biosev is seeking to sell 41.2m primary shares, with the option of a 15% greenshoe and 20% hot issue, in order to raise funds for its expansion plan and to repay debt. It 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. Meanwhile, Taesa was 3x subscribed heading into today’s scheduled pricing and Vesta was also oversubscribed as it pushed back its pricing one day until today, according to people following the transactions.