Chileans Move to Join Equity Pipeline

Latam Airlines and Compania Cervecerias Unidas (CCU) have both hired banks to mange upcoming equity follow-ons. The recent volatility has dampened the hopes of Brazilian issuers and IPOs, but bankers remained confident about the prospects of follow-ons from well-known issuers, particularly from the underrepresented Andean markets. Latam previously indicated a $1bn raise through the issue of 63.5m shares. The carrier formed from the merger of Lan and Tam has selected BTG Pactual and JPMorgan as international bookrunners, according to people familiar with the process. BTG’s Celfin is on the Chilean domestic portion, with perhaps another Chilean to be named later. The airline is said to be planning Chilean, US ADR and Brazilian BDR portions. The timing for the sale remains to be determined. Proceeds are destined for fleet enhancement. Separately, CCU has named the banks for its planned CLP340bn ($660m) equity capital raise, it says. The Chilean has hired JPMorgan, Citi, Deutsche Bank, and Goldman Sachs for the international portion. LarrainVial and BanChile are handling the local portion. The beverage company plans to issue 51m shares and timing remains to be determined. The new funds will allow it to finance growth, including increasing production. CCU plans to invest CLP1.35bn through 2020. This week, the MXP11.0bn Inbursa follow-on sale of secondary shares owned by CaixaBank is up next in the pipeline, joined by the MXP4.0bn OMA sale of secondary shares owned by ICA and a MXP4.4bn follow-on from Vesta. All three are scheduled for Tuesday. Beyond that, the market is waiting for others to launch – with follow-ons from Grana y Montero and Banorte being the most likely to move ahead, bankers say.