Chile proved to be a haven of equity market activity in April. Power company Enersis, a division of Italy’s Enel, spun-off of its local unit from the rest of its Latin American operations. Enersis Americas finished distributing stocks in Enersis Chile and total consideration came to about 4.3trn Chilean pesos ($6.43bn) based on the distribution of 49.1 billion shares.

The deal comes after parent company Enel approved a corporate restructuring of its Latin American business in November last year. Bankers away from the deal said the transaction had “finally come full circle” after multiple delays.

Chile’s Banco de Crédito e Inversiones in April raised more than $500m from an equity capital increase and subsequent private placement. The lender raised about $338m from a rights offering and another $164m from the private placement.

Institutional investors and hedge funds are looking more closely at Latin American equities now, on the back of a buoyant bond market and positive sentiment in US equities, one banker said. While the region is not free of volatility, he said the market can expect to see small issuances in the coming months.

On the origination side, bankers are pitching new companies to investors, for potential initial public offerings in the second half of 2016, a second source said. After a slow first quarter, equities bankers are confident that the success of the Argentine sovereign bond will transfer to equity opportunities, not just in Argentina, but Latin America.

Fideicomiso Hipotecario (FHipo) followed its November 2014 IPO with a 3.3bn Mexican peso ($193m) follow-on equity offering, the first global equity capital markets deal out of the country this year. Mexico’s pension funds, the Afores, were a key investor locally, while international interest came from long-only funds.

Two Brazilian companies led a change in fortunes there. Fras-le, which makes vehicle brakes and related products, priced a capital increase in April under Brazil’s rule 476. The company raised more than 300m reais ($87m). Port operator Rumo Logistica also bucked the trend, raising 2.6bn reais via a follow-on equity offering. The company sold 1.04bn new shares for 2.50 reais apiece through a 476 private placement.

Power struggle

Latin America’s power sector generated the bulk of M&A activity in the last month. Petrobras is close to inking a deal with Argentina’s Pampa Energía over the sale of Argentine assets. The pair extended talks for a further 30 days in mid-April. Petrobras could rake in as much as $1.5bn from the sale, sources said.

Pampa meanwhile, started talks with Harz Energy to sell its stake in natural gas pipeline operator Transportadora Gas del Sur (TGS) for about $250m, sources say. Under Argentine law, an oil and gas company cannot control a gas transporter. If Pampa wants to complete a deal with Petrobras, it needs to get a deal for TGS over the line quickly, one banker says.

In Brazil, the Lava Jato investigation is leading to more asset sales in the country’s infrastructure sector, sources say. Developers are offering to sell both brownfield and greenfield projects in a bid to raise funds and stay afloat. Engineering firms such as Andrade Gutierrez, OAS, Odebrecht and Galvão Engenharia have struggled to obtain financing in bank and bond markets since the investigation began in 2014.

“We’re going to see a fire sale, and that’s where foreign investors could come in,” one local infrastructure analyst says. He adds that Chinese investors have approached Galvão to buy a portion of the BR-153 federal highway concession.

Odebrecht Latinvest also started taking offers for its stake in natural gas pipeline Gasoducto Sur Peruano (GSP). The Brazilian developer owns 55% of the consortium building the pipeline. Spain’s Enagás and Peru’s Graña y Montero hold 25% and 20%, respectively.

Enagás could consider buying an additional 6% stake from Odebrecht’s 55%, a company spokesperson told LatinFinance in April. LF