Foreigners Boost Chilean IPO

Chile’s Inversiones La Construccion (ILC) has priced a CLP227bn ($469m) IPO, falling short of a $500m target but still becoming the largest-ever Chilean equity debut. Hooking more international investors than expected, the investment arm of the Camara Chilena de la Construccion (CChC) priced 3.7m primary and 28.5m secondary shares at CLP7,061 per share, according to the Bolsa. Total demand was CLP1.085trn, with competitive demand accounting for CLP555.85bn, according to the company. Foreigners buying into the 144a portion accounted for 35% of the sale. “This is a much higher portion of foreign participation than we expected,” says a banker managing the sale. The healthcare sector in LatAm is a popular one among investors, though ILC’s structure as a holdco for different types of businesses made it something of a challenging sell to those not familiar with Chile’s market. Local institutional and other non-retail buyers accounted for another 35% of the sale, with buyers linked to ILC making up 20% and 10% ending up in the hands of retail buyers. ILC is a holdco for health insurance firms including AFP Habita and Consalud and the Tabancura and Avansalud clinics. The secondary shares in the transaction are sold by CChC, which should maintain a 67% position in ILC. ILC is raising funds to capitalize its health care operations and for organic growth and acquisitions. Bank of America Merrill Lynch, IMTrust and JPMorgan managed the sale. The deal tops a $398m offering for Inversiones Aguas Metropolitanas in 2005 to become the largest in Chile’s history, according to Dealogic data. The shares closed Friday at CLP7,238. ILC brings to a close a week of mixed results in the LatAm IPO market, with Brazil’s Biosev pulling and Brazil’s Taesa and Mexico’s Vesta getting deals done. There is one more debut in the region scheduled prior to the traditional August hiatus, as Chilean construction firm Echeverria Izquierdo plans to raise about $100m-euqivalent in an August 3 sale.