QGOG Launches IPO

Brazil’s Queiroz Galvao Oleo e Gas (QGOG) has moved ahead with its IPO, seeking to raise at least $600m and price February 7. The US-registered deal contemplates the sale of 31.6m primary shares, assuming a 15% greenshoe, at $19-$21, meaning a $632m transaction if done at the midpoint. The oil services provider is raising funds to make down payments for two ultra-deepwater drillships, and raise capital for new and existing projects. JPMorgan, Bank of America Merrill Lynch, and Itau are global coordinators, along with Credit Suisse and Bradesco as joint bookrunners and Jefferies, DNB, Banco do Brasil, BNP Paribas and ING as co-managers. The QGOG Constellation unit is 80% controlled by QGOG International Sarl, a vehicle owned by members of the Queiroz Galvao family. The unit operates or is building 11 drillships in Brazil’s offshore drilling space, and booked $325.6m in Ebitda through the first nine months of 2012, after booking $211.4 for all of 2011. QGOG Constellation’s Luxembourg registration and a US listing are expected to help it attract global energy investors as well as the LatAm and EM-focused buysides that have been finicky in the last two years. Brazil has not seen an oil sector issuer since QGOG’s sister unit Queiroz Galvao Exploracao e Producao made its public equity debut in February 2011, raising just over $900m-equivalent. Seabras Servicos de Petroleo was another looking in 2012 that shied away. The region’s ECM pipeline is looking much stronger in 2013. This week will see Mexico’s Fibra Uno raise $1.0bn-$1.5bn in a follow-on Tuesday, followed by Pepsi bottler Cultiba raising $300m in a re-IPO. Grupo Sanborns, looking for $500m-$1bn, is heard ready to launch its IPO as soon as today.