Equatorial Defines Follow-on

Brazil’s Equatorial Energia plans to begin marketing a $600m-plus equity follow-on November 27, ahead of a December 6 pricing, according to regulatory documents. The energy holdco plans to sell 66m primary shares. This would indicate a BRL1.37bn ($663m) deal, assuming a 15% greenshoe is also used, based on Tuesday’s BRL18.09 closing price. A 20% hot issue, comprised of secondary shares owned by controller Vinci Partners, is also possible. About 70% of the proceeds are marked for capitalizing Centrais Eletricas do Para (Celpa), of which Equatorial bought control in September, with the remainder for acquisitions and working capital. The sale should take Equatorial’s free float to 52.6%, up from 24.2%. Bradesco, BTG Pactual, Goldman Sachs and Itau are managing. Equatorial agreed to buy 61.37% of heavily-indebted Celpa from Grupo Rede for BRL1.00, and is considering teaming up with CPFL Energia to buy all of Rede.