Pricing an initial public offering for a Mexican company was a tough act to pull off in mid-2015. Markets were volatile all year, and worries about a potential default by Greece were beginning to rattle even LatAm investors.
Nonetheless, Grupo Alfa pushed ahead, and walked away with a well-priced IPO for its autopart manufacturing subsidiary Nemak.
The listing raised 12.4 billion Mexican pesos ($656 million), including overallotment options.
Lead managers priced the share offering at the bottom of the target range. Yet the deal was multiple times oversubscribed, and around 40% of it was placed internationally. Alfa put 618 million Nemak shares up for sale, representing 19.9% of the company.
“We [priced] within the range we wanted to price and raised the amount we wanted to raise, despite the situation in Greece,” says Ramón Leal, Grupo Alfa’s chief financial officer.
Leal attributes the transactions success to several factors: the company’s position in the market, its list of top-tier clients and its global position.
“Alfa is a global company: it has a presence in China, Greece, India. This is a valuable factor because it can lend services to an international client base,” he says.
Nemak is considering selling a euro-denominated bond by the end of this year or early in 2017, says Leal.
Plans for other Alfa subsidiaries include prospects of a South America expansion of Alpek, the conglomerate’s petrochemical holding company. LF
WINNER: GRUPO ALFA