MPX Initiates Follow-on

Brazil’s MPX is looking to raise at least BRL1.38bn ($645m) through a public equity follow-on, the next planned stage in the process of Germany’s E.ON taking a bigger stake in the generator. The EBX unit is planning to sell 138m primary shares, assuming a 15% greenshoe. The lead managers have guaranteed a minimum BRL10.00 per share price – the same level at which E.ON agreed to buy BRL1.42bn shares in April directly from Batista. At the time it also pledged to buy BRL350m in the follow-on. The pricing date remains to be determined. MPX shares closed at BRL9.36 Friday. The proceeds will be used to reinforce the issuer’s capital structure and invest in new projects. E.ON should retain a 36.2% stake in MPX after the offering, while Batista’s stake will fall to 23.7% from 29.0%. Free floating shares will represent 39.2%. BTG Pactual and Goldman Sachs are managing.