Argentina’s Industrias Metalurgicas Pescarmona (IMPSA) has filed to spin off its renewables business through a Bovespa IPO. If successful, the moves would mark the second time an Argentine entity lists BDRs on the Bovespa, though Venti, as the unit is called, is technically a Luxembourg company. The first issuer was Banco Patagonia, which listed shares in Brazil in 2007. However, Venti, which is controlled by the Pescarmona family, has renewable energy assets in LatAm and Southeast Asia. It’s LatAm holdings include wind and hydro in Brazil, which accounts for the majority of revenues, Argentina, Chile, Venezuela and Colombia, while in Southeast Asia, it owns assets in Vietnam and Malasia. In 2009, hydro revenues totaled BRL265m while its wind businesses generated BRL133m. Total Ebitda in 2009 came in at BRL120m. Proceeds of the offering will go to investments in existing wind parks and hydro facilities (45%), new projects (30%) and working capital (25%). In December, IMPSA Wind, the wind power unit of the group that will become part of Venti, won concessions to operate 8 lots in the Brazilian state of Ceara totaling 211MW. That will likely demand investments of over BRL1bn. Total wind investments in Brazil in the coming years are expected to total BRL2.5bn, according to executives close to the initiatives. Bank of America-Merrill Lynch and BTG Pactual have been hired to lead the deal.
Latest News
Slow Convergence for Santander Brazil, Says CFO
Santander’s Brazil unit, which went public via a BRL14bn IPO in October 2009, will likely take up to 2 years or more to see its valuations converge with its larger peers Bradesco and Itau Unibanco, says CFO Carlos Galan. “To expect to converge [with other banks’ valuations] this year would be unrealistic,” he tells LatinFinance. “As we gradually fulfill our objectives, I expect we will converge and capture the differential we have with [Bradesco and Itaú],” says Galán. The statement is a departure from what at least some bankers and Santander executives sought going into the IPO process last year. At the time, some of the more bullish expectations included a valuation on par with or above Bradesco’s, though investors were unanimous in demanding a discount to compensate for the lack of a track record. The touted IPO was priced at the BRL23.50 midpoint of the stated range, but quickly traded down. As of yesterday it was 5.6% below its issue price. The deal came at 2.7x price to tangible book and a P/E of 10.7x, substantially below Bradesco. Earlier this week, Santander units were trading at a discount to Bradesco’s preferred shares of over 20% on a P/E and 20% on a P/BV basis, according to Economatica. Discounts to Itaú Unibanco PNs were approximately 35% and 40% for P/E and P/BV, respectively. While the bank expects strong growth in a number of products, integration remains the chief concern and Galan expects that to be wrapped up by Q3. The unti’s first 2 quarters have failed to impress some analysts. “We found weaker margins and the stagnant asset quality disappointing,” says Goldman Sachs in a report following Santander’s Q4 earnings announcement earlier this month. The shop, which was the first to initiate coverage of Santander’s Brazil-listing, has a neutral recommendation on the stock. “They promised a lot of things during the IPO and are having trouble delivering them,” says a São Paulo-based banks analyst at a European shop, referring to overall performance o
Mexico GDP Outlook Brightens
Mexico’s finance ministry has improved its outlook for GDP growth in 2010 to 3.9% from 3.0%, as non-oil exports, domestic demand and activity in manufacturing, commerce and transportation show signs of rebounding. “The new forecast is in line with those of private sector analysts and international entities, which agree that the Mexican economy will grow more than previously expected in 2010,” says the finance ministry.
Findeter Places Credit Deposit Notes
Colombian state-owned development finance agency Findeter has placed COP300bn ($155m) in credit deposit notes via a Dutch auction. It sold COP100bn in a 2-year tranche paying DTF plus 1.08% and COP200bn in a 5-year tranche paying IPC plus 3.92%, says financial officer Fredy Vivas. He adds that total demand clocked in at COP679bn. Findeter structured and managed the operation itself.
Vene Claims $80bn in Oil Investments
Venezuelan president Hugo Chavez says investment in oil projects along the Orinoco belt will reach $80bn between 2010 and 2016, according to information from the local energy and oil ministry. The ministry adds that of the total, $30bn will be invested in the Carabobo area and the rest in Junin. Spain’s Repsol, which is in partnership with India Oil & Natural Gas, Malaysia-based Petronas, Oil India and Indian Oil, will hold a 40% participating interest in 3 blocks in Carabobo. PDVSA will hold the remaining 60%, a Repsol spokesman says, declining to confirm how much the consortium will invest. Chevron, in partnership with Japan’s Inpex, Mitsubishi and Venezuela’s Suelopetrol will also hold a 40% stake in another Carabobo block with PDVSA keeping the balance. Meanwhile, Italy’s Eni will develop a block in Junin. As with the other deals, Eni will hold 40% while PDVSA holds 60% in the venture. Eni says in a statement that it will pay $646m to develop the block. Calls to Eni and Chevron seeking comment were not returned.
Goldcorp Nabs El Morro Stake
Goldcorp has acquired a 70% stake in the El Morro copper and gold project in Chile’s Atacama region from New Gold, says the buyer. As part of the deal, Goldcorp loaned New Gold $463m so it could purchase the 70% stake in the project from Xstrata Chile by exercising its right of first refusal. Once New Gold acquired the stake in Xstrata Chile, Goldcorp proceeded to acquire it from New Gold. It also transferred $50m in cash to New Gold. With the completion of these transactions, El Morro is now owned 70% by Goldcorp and 30% by New Gold. This deal, originally announced in January, was delayed when Barrick Gold sued New Gold over the right to buy the 70% stake. Barrick, who challenges the legality of New Gold’s purchase, says it will continue to challenge the deal. Goldcorp’s financial advisors are GMP Securities, and legal counsel are Cassels Brock & Blackwell. New Gold’s financial advisor is BMO Capital Markets and it was aided by Lawson Lundell on the legal side. El Morro is an advanced stage copper and gold project in north-central Chile. Goldcorp says it contains proven and probable reserves of 6.7m ounces of gold and 5.7bn pounds of copper. Goldcorp president Chuck Jeannes says El Morro is in “one of the best mining jurisdictions in South America.” Goldcorp has operations throughout the Americas and says its gold production is 100% unhedged.
Voto Inches up Cimpor Stake
Votorantim has acquired a 4.0% stake in Cimpor belonging to Cinveste, a vehicle that owns several large equity stakes in Iberian companies. Voto now has effective control over 30.8% of the voting shares of Cimpor, thanks to a shareholders agreement it previously signed with Caixa Geral de Depositos, which owns 10.0%, giving it the largest piece of the Portuguese cement producer. The main pieces of Cimpor that have not yet been sold to a Brazilian company are Manuel Fino’s 10.7% stake and the 18.9% free float. CSN is heard aggressively chasing both as it tries to catch up with Voto and Camargo Correa, which now have 30.8% and 28.7%, respectively.
Codensa Clinches Local Bonds
Colombian energy company Codensa has sold COP225bn in local bonds. The issue has 2 tranches, one with a 3-year term paying IPC plus 2.98% and the other for 6 years paying IPC plus 3.92%. The 3-year sold COP80.00bn and the 6-year sold COP145bn, says Francisco Chaves, a DCM banker with Corredores Asociados. He adds that total demand was COP902bn. Proceeds of the AAA rated issue will be used to refinance debt, the company says. Codensa structured the sale itself and placed it with the help of BBVA, Correval and Corredores Asociados.
RBS Shedding Colombia Unit
Royal Bank of Scotland (RBS) is in advanced talks to sell its Colombia unit and an announcement should be made soon, says a spokesman. RBS’s presence in Colombia is not significant, as figures from the local financial regulator show that it has less than a 0.25% market share by assets. RBS Colombia’s assets were around $247.80m at the end of 2009. A Bogota-based equities analyst who covers the local banking industry thinks that a deal could be worth $50m-$75m and says that most likely buyers are international banks with local exposure, such as Citi, HSBC, Santander and BBVA. The RBS spokesman says that there are other LatAm operations that the bank has identified as being “non-core” and could possibly be divested too. The bank has assets in Argentina, Chile and Venezuela. RBS is divesting non-core assets globally. For instance, RBS Sempra Commodities says it has agreed to sell its metals, oil and European energy business lines to JPMorgan for $1.7bn.
Ecopetrol Seeks $3.5bn in 2010
Colombian state-controlled oil producer Ecopetrol plans to raise as much as $3.5bn in the international markets this year. The company plans to make use of bond markets, credit facilities, multilateral and export-import loans, as well as the possible sale of non-strategic assets to help fund $6.93bn in 2010 capex, CEO Javier Gutierrez says in a conference call. Subsidiaries should need to raise up to a combined $2.3bn this year, and will do so themselves, he says. They include oil producer Hocol, the Refineria de Cartagena refinery, petrochemical unit Propilco, and pipeline operators Ocensa and ODL. Ecopetrol secured a preliminary loan commitment from US Exim in January for $1.00bn. Bond investors anticipate a follow up to the $1.5bn in 7.625% of 2019 bonds Ecopetrol sold last year via a well-received dollar debut.