CPFL Set for IPO

Brazil’s CPFL Energias Renovaveis is scheduled to price an IPO today, targeting more than BRL900m ($400m). The renewable energy arm of utility CPFL is offering 28m primary shares and 44m secondary shares at BRL12.51-BRL15.01, meaning a BRL1.14bn transaction at the midpoint if a 15% greenshoe is included. Books were heard to be more than half covered on Tuesday. The issuer first tried to price an IPO last year, with market conditions getting in the way. This time, though, the deal counts on a guarantee from lead manager BTG Pactual to buy 56% of the shares, and a pledge from pension fund Previ to buy around BRL400m. Cash from the primary portion of the IPO will go to existing developments and new projects. Selling shareholders in the secondary offering include investor Roberto Sahade and funds linked to Patria Investimentos and Bradesco. Parent company CPFL Geracao is expected to cut its holding in the unit to 57.6%, from 63.0%. Bank of America Merrill Lynch, BTG Pactual and Itau are global coordinators, with Banco do Brasil, Bradesco and Morgan Stanley as bookrunners. Formed through the 2011 merger of CPFL Energia and ERSA, CPFL Renovaveis operates hydroelectric, wind, solar and other types of renewable power generation in Brazil, with 5,553 megawatts installed capacity.