Brazilian steel and ore specialist CSN says it has not acquired any shares in Cimpor after its public tender for a minimum of 33% and a maximum of 100% of the target’s 672m shares failed to reach the minimum threshold. In a statement posted on the CMVM, NYSE Euronext notes CSN was only able to acquire 8.6% of the company’s shares, well short of the third it sought. On February 12, CSN had revised its original offer by increasing the price per share of its offer to EUR6.18 from EUR5.75 and lowering the minimum target to 33% plus one share from 50% plus a share. With CSN out of the bidding, for the moment at least, Cimpor’s shareholder structure stands as follows, according to the company: Camargo Correa owns 28.6% of the total shares and of the voting rights, having acquired stakes from Teixeira Duarte and Bipadosa; Grupo Votorantim owns 21.2% of the share capital and 30.8% of the voting rights alongside Caixa Geral de Depositos, which separately also owns 9.6% of the share capital; Manuel Fino owns 20.3% of the shares and 10.7% of the capital and 20.3% of the voting rights; Banco Comercial Portugues owns 10.0% of shares and votes, and public investors account for 19.1% of the shares and voting rights. Credit Suisse advised Camargo Correa, Deutsche advised Votorantim and BES advised CSN.
Latest News
Stakeholder Opts for Smaller LAN Slice
Chile’s Cueto family, which owns a 25% stake in LAN Airlines through its Costa Verde Aeronautica holdings, says it is buying only an 8.6% additional stake in the airline from Axxion and Inversiones Santa Cecilia, which are controlled by president-elect Sebastian Pinera. The move, which will cost the Cuetos CLP264bn ($488m), has surprised market watchers who expected the family to purchase all of the 21.10% in LAN it had a right of first refusal on. Costa Verde had also recently announced plans to raise $1bn equivalent in additional equity, a deal presumed to be done in anticipation of the full exercising of the LAN stake option. The move opens the possibility for Brazil’s TAM to buy a larger stake in LAN than originally what was originally expected by the market. Brian Moretti, equities analyst at Planner Corretora in Sao Paulo, writes in a research note that TAM has around $725m in cash, enough to acquire the remaining 12.5% stake held by the Chilean entities. Based on the CLP9,100 per share paid by Costa Verde Aeronautica, the remaining stake could be worth CLP391bn ($723m). The Cuetos are paying for their smaller stake with CLP237bn going to Axxion and CLP27bn to Inversiones Santa Cecilia. Of the total amount, the buyers say they will pay CLP132bn in cash at closing and the remaining CLP105bn in installments.
Ferrous Mum on Indian Overtures
Brazil’s Ferrous Resources is reported to be evaluating a $2.5bn offer made by India’s largest miner National Mining Development Corp. (NMDC) for a 50% stake, according to Indian daily Economic Times. A Ferrous spokeswoman declines to comment and senior officials at Ferrous could not be reached. Nevertheless, NMDC has publicly said that it is seeking opportunities to invest in iron ore, coal, manganese, diamond and gold assets around the world. It says it is seeking to lease, buy properties or form joint ventures.
Mexico Prints 10-Year Benchmark
Mexico’s central bank has raised MXP25bn in local bonds by employing a bookbuilding process designed to ensure a broad, diverse distribution in the local market. Demand for the new 2020 notes was strong, totaling MXP75bn, which allowed the sovereign to issue the notes flat to the interpolated curve between the 2018 and 2023 maturities, says Gerardo Rodriguez, deputy undersecretary for public credit. “Distribution was very evenly balanced,” Rodriguez tells LatinFinance, noting 44% of the deal went to Afores, 15% to local banks, 15% to foreign and local hedge funds, 12% to local mutual funds and 7% to insurance companies, with the rest going to smaller accounts. Some 80% of the participation was from local investors and the remainder was foreign, which is in-line with the standard breakdown for Mexico’s local debt market. The 8.00% bonds were priced at 102.396 to yield 7.66%, right between the 7.56% and the 7.89% the two outstanding benchmarks were trading at, he adds. Last week, the public credit division had said it expected to raise MXP15bn-MXP25bn at a yield of around 8%, but it benefitted from a subsequent multi-session rally in local spreads. “The syndication concept is one we have just introduced [to our local market issuances] in 2010,” says Rodriguez. The official says the ministry plans to syndicate, or build a book for the first benchmark in each series, and then reopen them using the usual auction process. The next benchmark, to be issued in March, will be a 30-year, he adds, and a new 5-year note will come later on in the year.
New AMX Plans MXP, USD Bonds
America Movil (AMX) is planning its first bond issuance since announcing it will take control of Carso and Telmex via M&A expected to forge the world’s third biggest telecom. Next week, the Mexico-based firm aims to place up to MXP15bn in the domestic market, AMX CFO Carlos Garcia Moreno tells LatinFinance. This will include up to MXP6bn in a 5-year floater, up to MXP7bn in a 10-year fixed rate note, and maximum MXP2bn in a 15-year UDI-denominated bullet. The CFO declines to state price expectations, though notes that AMX is rated 2 notches higher than the sovereign by one agency and on positive outlook from the others. The forthcoming notes received an A3/Aaa.mx rating from Moody’s while S&P its mxAAA mark for the company’s issuance. Garcia also underscores benefits of the tie up with Carso and Telmex, which he says makes AMX 8th biggest globally by revenue and 3rd by market cap. It should also significantly boost the ability to deliver new data by leveraging fixed lines, says the CFO. “The new company is so much stronger than anything you had in separate pieces that we have to start with new prices,” Garcia says, speaking of the local deal. “The old prices generally are not representative, they should not be the reference,” he adds. Garcia is known for aggressive pricing and getting strong comparative execution versus other markets, including dollars. Local investors estimate the 10-year could come anywhere between 75bp-100bp over the Mbono, while the 5-year floater could land 50bp-80bp wide of TIIE. AMX is roadshowing the MXP deal this week in Monterrey. Banamex is the lead on the transaction, which wraps up a local shelf, and will likely be joined by another bank. The 3-part sale will be followed by a dollar issue this year, after roadshows in Q2. “We likely will be going to various markets,” says Garcia. AMX plans to visit large investors to explain to them the dynamics of the new company, probably in April. The combined merged entity would have approximately $
BNDES Posts Bigger Profit
Brazilian development bank BNDES says it recorded a profit of $2.0bn in 2009, a 26.8% increase from the previous year. The bank attributes the increase in returns to growth in its credit operations’ and securities’ portfolios. This was helped by allocation of $57.9m in funds from the national treasury in 2009. BNDES says it disbursed $75.5bn in 2009.
Mexico GDP Outlook Brightens
Bank of America-Merrill Lynch (BAML) has boosted its forecast for Mexico’s GDP growth to 4.0% in 2010, an improvement of its previous forecast of 3.0%. BAML cites a stronger-than-expected recovery in the country’s manufacturing sector. “This year’s recovery will be an external demand led recovery as Mexico’s industrial sector follows the auto-led manufacturing rebound in the US,” says BAML. The recovery is from a low base. Mexico’s GDP contracted 6.5% in 2009. Goldman Sachs has also improved its 2010 GDP growth forecast to 5.0% from 4.2% previously, as government statistics show better-than-expected 4Q09 GDP growth. While Goldman Sachs expected 1.5% expansion, actual growth came out at 2.0% for the quarter. Mexico’s treasury last week revised upwards its GDP growth projection for 2010 to 3.9% from 3.0%.
Vale in Race to Build Hydro Plant
Brazil’s Vale says it has signed a memorandum of understanding with Andrade Gutierrez Participacoes, Neoenergia Investimentos and Votorantim Energia, to form a consortium to participate in the public auction and bidding process of the Belo Monte hydroelectric power plant in the Brazilian state of Para in April. The plant, expected to cost around BRL20bn to build, will generate about 11GW of electricity, according to the local mines and energy ministry. It is expected to be operational in 2015.
Cemex Pours Ready Mix Proceeds On Debt
Cemex – whose Ready Mix USA joint venture is selling 12 quarries and other assets to San Francisco-based private equity shop SPO Partners for $420m – says it will use the proceeds to pay down more bank debt. Cemex owns a 49.9% stake in Ready Mix, and stands to receive $100m from the sale of non-strategic assets. The Mexican company says it will use the cash to continue paying down a $15bn mountain of debt it renegotiated last October. Other parts of the prepayment effort include $1.7bn from Holcim Australia, $2.2bn in equity and mandatory converts issued last year, and $2.3bn in USD and MXP denominated bonds, says the company.
Mexico Kicks off Local 2020 Bond Auction
Mexico’s central bank says it will place Thursday up to MXP25bn in 10-year syndicated bonds via the first local debt market auction of its kind. The coupon is 8%. The government bonds, due June 2020, will be auctioned Tuesday and placed Thursday, says Banxico. Gerardo Rodriguez, Mexico’s deputy undersecretary for public credit, said earlier this month that the deal would raise MXP15bn-MXP25bn. The Mexican government is trying to broaden its investor base with the new domestic debt sale mechanism, which is designed to foster liquidity in new peso benchmarks. The issuer hopes that the bonds will be eligible for fixed income indices. Mexico has named Santander, JPMorgan, Bank of America Merrill Lynch and BBVA Bancomer as managers, with Banamex, ING and HSBC co-managers.