Daily News
Brazil's
credit deposit insurer FGC may take over Banco Cruzeiro do Sul
Story Brazil's credit deposit insurer, Fundo Garantidor de Créditos
(FGC), may take control on Monday of Banco Cruzeiro do Sul (Bovespa: CZRS4), a
Sao Paulo-based middle market bank. The most probable mechanism is that Brazil
Valor reported that it had learned that the situation of Banco Cruzeiro
do Sul became unsustainable after an inspection by the central bank identified
a series of fictitious credits registered in the bank's financial statements,
giving the bank what the business newspaper termed a gap of BRL 1.5bn (USD
735m.) With the fictitious credits, the bank would have negative net equity on
the order of BRL 400m (USD 196m), Valor reported. The online report cited two
unidentified people accompanying the case for the financial information.
The negotiations for Banco BTG Pactual (Bovespa: BBTG11), Brazil’s
largest investment bank, to assume control of Banco Cruzeiro do Sul, have
collapsed, ending the attempt to find a solution for the problems found in the
institution controlled by the Indio da Costa family, Valor reported. It didn’t
say in the online report why the negotiations failed.
The shares of Banco Cruzeiro do Sul plunged almost 16% on the Sao Paulo
Stock Exchange on Friday, bringing the loss in the stock to 40% last week,
Folha de S. Paulo reported Saturday. The bank confirmed that it was talking
with another bank, which wasn’t identified, after the reported possible sale to
Banco BTG Pactual encountered obstacles, according to Folha. Value USD 196m
(reported though unconfirmed net negative equity) Stake Value 100%.
Source Valor
Economico, Folha de Sao Paulo.
Vale
not interested in acquiring majority in ThyssenKrupp's CSA plant
Story Vale, the listed Brazilian resources group, is not interested in
acquiring a majority stake in the local steel plant CSA from ThyssenKrupp,
Financial Times Deutschland reported. A Vale spokesperson said that the company
is not interested in acquiring the majority stake in any steel works but would
not rule increasing its current 27% stake in CSA. Value USD 7,420m (CSA steel
plant construction costs).
Source Financial Times Deutschland.
J&F
rescinds on bid to buy Delta Construcoes
J&F Participacoes, the holding company that controls JBS (Bovespa:
JBSS3), the world’s largest beef processor, has withdrawn its bid to buy Delta
Construcoes. J&F has stepped back from the deal, O Globo reported, citing
Joesley Batista, president of the holding company which also controls the large
start-up pulp producer Eldorado Celulose e Papel.
Delta, Brazil
J&F will decide if it will exercise its option to buy Delta only
after a rigorous process of auditing by accounting firm KPMG is completed of
the construction company in the coming months, according to a statement published
by J&F on 10 May. Rio de Janeiro-based Delta has annual revenues of BRL 4bn
(USD 2bn), J&F said in a statement confirming the agreement in May.
The decision to rescind on its bid was taken before the preliminary
reports were delivered, Batista said, according to O Globo's front-page story
quoting the executive this weekend.
Folha de S. Paulo also reported that J&F has decided to renege on
its plan to buy Delta, citing an announcement of the holding company.
Delta was put up for sale after being suspected of involvement in a
corruption scheme, Valor Economico reported in early May. Delta, controlled by
Fernando Cavendish, was put up for sale due to suspected scandals involving
Carlinhos Cachoeira. The company is facing the loss of contracts, according to Sao Paulo
Source O Globo, Folha
de Sao Paulo.
J&F
buys 25% stake in Eldorado Celulose as pulp maker prepares for event ual IPO
J&F Participacoes, which controls beef packer JBS (Bovespa: JBSS3),
is buying the 25% stake held by Mario Celso Lopes in Eldorado Celulose e Papel.
J&F is buying the 25% stake at an undisclosed price, Folha de S. Paulo
reported, citing Joesley Batista, president of the holding company J&F
Participacoes.
Batista said he couldn’t disclose the price because of a confidentially
agreement. Celso Lopes, who invests through a company called MCL
Empreendimentos e Negocios, said his selling his stake is related to the event ual initial public offering or sale of Eldorado
Celulose, Folha reported in its column Mercado Aberto, or open market. Eldorado
Celulose already has filed to open its capital with Brazil
This news service confirmed with Brazil
Eldorado Celulose is building a factory in Brazil
Brazilian pulp startup Eldorado Celulose had a BRL 2.7bn loan (USD 1.7bn
at the exchange rates at time of the approval) approved by Brazil
Source Folha de Sao Paulo, Regulatory Authority Press Release
(Translated).
Cimpor:
Investifino could launch legal challenge to Camargo Correa's EUR 5.50 a share
offer
Cimpor shareholder Investifino is considering a legal challenge to
Camargo Correa’s EUR 5.50 a share offer on the listed Portuguese cement group
which ends on 19 June, reported Diario Economico. Sources familiar with the
process told the business publication that Investifino, with a 10.7% stake in
Cimpor, believes Camargo has violated the principle of equal treatment of
investors. Investifino, the investment vehicle of private investor Manuel Fino,
also wants an independent evaluation of the Camargo offer which was registered
last week as mandatory by the CMVM Portuguese Securities Commission.
Investifino’s potential legal challenge to the Cimpor takeover will also call
for compensation to be paid to small investors, the same sources said.
Elsewhere, Jornal de Negocios cited CMVM chairman Carlos Tavares as telling a
cross-party committee of MPs that the Cimpor offer price was not fixed between
shareholders involved in the process. The CMVM chief also told lawmakers that
no reasons have been uncovered to require independent evaluation of the Camargo
offer price. Value USD 2,090m (camargo bid value) Stake Value more than 30%
inclusive.
Source Diario Economico, Jornal de Negocios.
July IPO Season Challenged by Sour Markets
The Bovespa and Mexican Bolsa continued to lose ground along with global equity markets last week, creating fresh doubts about the IPOs in the Mexican and Brazilian pipelines that had hoped to price before the traditional August vacation period. Follow-ons might still get done, bankers say, but the 5 Brazilians and one Mexican with filed documents now face longer odds to get a deal done in the July window. If bad news
continues, a repeat of 2011, in which few deals were done in the second half, is possible. “Markets are very challenging for equities. We are unlikely to see IPO’s [from LatAm] anytime soon,” says a New York-based ECM banker. Poor US job numbers last week, as well as continued fallout in the US IPO market from the problems surrounding Facebook’s recent IPO, also don’t help the situation. “At a reasonable price, some of
these deals could still get done, but if the markets soften further it will be very difficult,” another ECM banker says. A follow-on from Brazil Pharma scheduled for June 21 and Suzano, for June 27, still are likely to get done, bankers say. However, IPOs to be launched from Mexico’s Vesta and Brazil’s CPFL Renovaveis, Vix Logistica, Pague Menos, LDC Bioenergia and Manabi, some of which are in pre-roadshow marketing, may not have the same luck. For some in the pipeline, alternatives include a record amount of private equity cash deployed in the region, as well as strategic investors. Eike Batista’s gold mine unit, planning a Colombia listing for the AUX gold miner, has hired Bradesco to seek funding alternatives, according to a spokesperson, though the public sale could still happen if conditions permit. EBX has already sold chunks of
itself to international strategic investors looking to get into Brazilian commodities and infrastructure plays at the pre-IPO stage. The Bovespa dropped 1.95% last week and has lost 5.91% year to date. Mexico’s Bolsa shed 0.81% last week, though it is still up 0.28% on the year. ECM volume stood at $9.04bn from 34 deals through Friday, according to Dealogic, down from the $19.01bn from 41 in the corresponding period in 2011.
The Bovespa and Mexican Bolsa continued to lose ground along with global equity markets last week, creating fresh doubts about the IPOs in the Mexican and Brazilian pipelines that had hoped to price before the traditional August vacation period. Follow-ons might still get done, bankers say, but the 5 Brazilians and one Mexican with filed documents now face longer odds to get a deal done in the July window. If bad news
continues, a repeat of 2011, in which few deals were done in the second half, is possible. “Markets are very challenging for equities. We are unlikely to see IPO’s [from LatAm] anytime soon,” says a New York-based ECM banker. Poor US job numbers last week, as well as continued fallout in the US IPO market from the problems surrounding Facebook’s recent IPO, also don’t help the situation. “At a reasonable price, some of
these deals could still get done, but if the markets soften further it will be very difficult,” another ECM banker says. A follow-on from Brazil Pharma scheduled for June 21 and Suzano, for June 27, still are likely to get done, bankers say. However, IPOs to be launched from Mexico’s Vesta and Brazil’s CPFL Renovaveis, Vix Logistica, Pague Menos, LDC Bioenergia and Manabi, some of which are in pre-roadshow marketing, may not have the same luck. For some in the pipeline, alternatives include a record amount of private equity cash deployed in the region, as well as strategic investors. Eike Batista’s gold mine unit, planning a Colombia listing for the AUX gold miner, has hired Bradesco to seek funding alternatives, according to a spokesperson, though the public sale could still happen if conditions permit. EBX has already sold chunks of
itself to international strategic investors looking to get into Brazilian commodities and infrastructure plays at the pre-IPO stage. The Bovespa dropped 1.95% last week and has lost 5.91% year to date. Mexico’s Bolsa shed 0.81% last week, though it is still up 0.28% on the year. ECM volume stood at $9.04bn from 34 deals through Friday, according to Dealogic, down from the $19.01bn from 41 in the corresponding period in 2011.
Brazilian Bank Postpones CHF Bond
Brazil’s Banco Pine has cancelled plans to raise funds in the Swiss bond market. “In light of increased volatility and deteriorating market conditions Banco Pine has decided to refrain from pursuing its debut CHF bond transaction for now,” the lender says in a statement to investors. The mid-sized bank had been considering a minimum CHF80m ($83m) 2.5-year bond and released guidance of mid-swaps plus 493bparea, and hoped to price Friday.“The timing for Pine was not adequate, the name is not that well-known
within Swiss investors and there is a general lack of appetite for Brazilian banks, in particular for mid-size,” says a Swiss investor who had been looking at the deal. UBS was sole lead on the transaction, which had a BB rating. In April last year, it had plans to issue a $300m 5-year bond in the dollar market but later postponed amid a backdrop of tanking US equity markets and oversupply from Brazilian mid-sized banks. The volatility has not closed Switzerland off to all issuers, with supranational bank CAF selling CHF175m last week.
Brazil’s Banco Pine has cancelled plans to raise funds in the Swiss bond market. “In light of increased volatility and deteriorating market conditions Banco Pine has decided to refrain from pursuing its debut CHF bond transaction for now,” the lender says in a statement to investors. The mid-sized bank had been considering a minimum CHF80m ($83m) 2.5-year bond and released guidance of mid-swaps plus 493bparea, and hoped to price Friday.“The timing for Pine was not adequate, the name is not that well-known
within Swiss investors and there is a general lack of appetite for Brazilian banks, in particular for mid-size,” says a Swiss investor who had been looking at the deal. UBS was sole lead on the transaction, which had a BB rating. In April last year, it had plans to issue a $300m 5-year bond in the dollar market but later postponed amid a backdrop of tanking US equity markets and oversupply from Brazilian mid-sized banks. The volatility has not closed Switzerland off to all issuers, with supranational bank CAF selling CHF175m last week.
CAF Continues Diverse Funding Amid Volatility
Regional development bank CAF has landed bond transactions in Switzerland and Hong Kong. The Andean development bank issued a CHF175m ($180m) 2.5-year floating-rate bond at par with a coupon of 3-month Libor+145bp. The price represents a 20bp increase from its last issuance, of CHF125m in February. CAF CFO Hugo Sarmiento tells LatinFinance that while spreads have widened due to volatility, the conservative
Swiss market is open to a few select issuers, and represents geographic and investor diversification. Credit Suisse managed. A1/A+/A+ rated CAF also tapped the Hong Kong dollar market, for HKD398m ($51m). The 12-year bond priced at par with a 4.00% coupon. Goldman Sachs led that transaction. The two transactions follow a $50m-equivalent 30-year note issuance in the Taiwanese market in April.
Petrominerales Clinches Converts
Petrominerales has priced a $400m convertible bond sale, it says. The 3.25% 2017 bonds are convertible in to common shares at $18.0017 per bond, representing a 35% premium to Thursday’s closing price. The shares closed Friday at CAD31.04 ($12.54). The Toronto-listed Colombian oil producer is raising money to fund a tender offer, through which it is to buy back $250m of its 2.625% 2016 bonds, at a price of 98.5. The
operation leaves $272m outstanding in the 2016s ahead of a 2013 call date. ABG Sundal Collier Norge managed both the sale and the tender.
Petrominerales has priced a $400m convertible bond sale, it says. The 3.25% 2017 bonds are convertible in to common shares at $18.0017 per bond, representing a 35% premium to Thursday’s closing price. The shares closed Friday at CAD31.04 ($12.54). The Toronto-listed Colombian oil producer is raising money to fund a tender offer, through which it is to buy back $250m of its 2.625% 2016 bonds, at a price of 98.5. The
operation leaves $272m outstanding in the 2016s ahead of a 2013 call date. ABG Sundal Collier Norge managed both the sale and the tender.
BR Properties Readies Local Debut
BR Properties plans to raise BRL400m ($199m) in its first-ever domestic bond transaction, it says. The issue will have a 2017 tranche paying the DI plus up to 1.0% and an inflation-linked 2019 tranche paying up to 6.25%. The size and exact rate will be determined during the bookbuilding process, scheduled for July 13- 26. Roadshows are scheduled to start June 18. The proceeds are targeted to repay short-term debt. Banco
Votorantim, Bradesco, BTG Pactual, Citi, Itau and Santander are managing the sale, rated AA on a national scale.
BR Properties plans to raise BRL400m ($199m) in its first-ever domestic bond transaction, it says. The issue will have a 2017 tranche paying the DI plus up to 1.0% and an inflation-linked 2019 tranche paying up to 6.25%. The size and exact rate will be determined during the bookbuilding process, scheduled for July 13- 26. Roadshows are scheduled to start June 18. The proceeds are targeted to repay short-term debt. Banco
Votorantim, Bradesco, BTG Pactual, Citi, Itau and Santander are managing the sale, rated AA on a national scale.
Daimler Preps MXP Bond
Daimler Mexico is planning to issue up to MXP 1bn ($70m) in 2 or 3-year floating rate domestic bonds, according to a banker on the deal. The car manufacturer’s notes come with a guarantee from the Germanybased parent, and could be priced as soon as mid-June. BBVA Bancomer and Banamex are managing the sale, rated AAA on a national scale. Daimler last came to market in September, when it priced a MXP1bn ($73m) 3-year bond at TIIE+50bp.
Daimler Mexico is planning to issue up to MXP 1bn ($70m) in 2 or 3-year floating rate domestic bonds, according to a banker on the deal. The car manufacturer’s notes come with a guarantee from the Germanybased parent, and could be priced as soon as mid-June. BBVA Bancomer and Banamex are managing the sale, rated AAA on a national scale. Daimler last came to market in September, when it priced a MXP1bn ($73m) 3-year bond at TIIE+50bp.
Triunfo Plots Local Bond
Brazilian infrastructure company Triunfo plans to raise BRL300m ($149m) in the domestic market, it says. It is looking for funds to replace existing debt, and does not give indications of pricing, tenor or timing. BTG Pactual has been hired to manage.
Brazilian infrastructure company Triunfo plans to raise BRL300m ($149m) in the domestic market, it says. It is looking for funds to replace existing debt, and does not give indications of pricing, tenor or timing. BTG Pactual has been hired to manage.
Cruzeiro Considers Sale
Brazil’s Banco Cruzeiro do Sul is in discussions about “strategic alternatives for its businesses,” it says. Nothing binding has come out of any discussions. As with other mid-sized Brazilian lenders, the bank has seen debt funding become a bit more complicated, particularly in the international markets. Moody’s lowered Cruzeiro to B2 from Baa3 with a negative outlook in April. BTG Pactual, which took over troubled lender Panamericano in 2010, has been floated as a possible buyer.
Brazil’s Banco Cruzeiro do Sul is in discussions about “strategic alternatives for its businesses,” it says. Nothing binding has come out of any discussions. As with other mid-sized Brazilian lenders, the bank has seen debt funding become a bit more complicated, particularly in the international markets. Moody’s lowered Cruzeiro to B2 from Baa3 with a negative outlook in April. BTG Pactual, which took over troubled lender Panamericano in 2010, has been floated as a possible buyer.
Ratings Agencies Bring Paper Cuts
Mexico’s Scribe and Brazil’s Suzano Papel e Celulose have both seen ratings downgrades. Moody’s lowered Scribe to B1 from Ba3, based on the company's weakened credit profile over the last 9 months, driven by higher debt incurred to finance the acquisition of the Colombian notebook business from Kimberly Colpapel, Moody’s says. Weak Ebitda generation resulting in high leverage and low interest coverage are also factors. “We estimate that for the first quarter of 2012 debt/Ebitda will improve but remain high at levels around 6.5x as Ebitda increases due to the absence of extraordinary expenses combined with relatively lower average foreign exchange rate and pulp prices,” the agency says. The outlook is stable. Meanwhile, S&P has lowered Suzano to BB from BB+, it says. Suzano's “high debt is likely to persist for the next 2-3 years, as the company continues financing its expansion plan,” S&P says. The outlook is stable. Suzano is scheduled to raise BRL1.5bn ($750m) through an equity follow-on June 27.
Mexico’s Scribe and Brazil’s Suzano Papel e Celulose have both seen ratings downgrades. Moody’s lowered Scribe to B1 from Ba3, based on the company's weakened credit profile over the last 9 months, driven by higher debt incurred to finance the acquisition of the Colombian notebook business from Kimberly Colpapel, Moody’s says. Weak Ebitda generation resulting in high leverage and low interest coverage are also factors. “We estimate that for the first quarter of 2012 debt/Ebitda will improve but remain high at levels around 6.5x as Ebitda increases due to the absence of extraordinary expenses combined with relatively lower average foreign exchange rate and pulp prices,” the agency says. The outlook is stable. Meanwhile, S&P has lowered Suzano to BB from BB+, it says. Suzano's “high debt is likely to persist for the next 2-3 years, as the company continues financing its expansion plan,” S&P says. The outlook is stable. Suzano is scheduled to raise BRL1.5bn ($750m) through an equity follow-on June 27.
Belize Lowered Again
Moody’s has downgraded Belize’s credit rating to Ca from Caa1, it says. “The downgrade reflects the government’s deteriorating capacity and willingness to service its external debt as well as Moody’s assessment of investor losses in the event of a debt restructuring,” the agency says. It also notes weak growth prospects, the country’s contingent liabilities and a “questionable” outlook for debt sustainability.
Moody’s has downgraded Belize’s credit rating to Ca from Caa1, it says. “The downgrade reflects the government’s deteriorating capacity and willingness to service its external debt as well as Moody’s assessment of investor losses in the event of a debt restructuring,” the agency says. It also notes weak growth prospects, the country’s contingent liabilities and a “questionable” outlook for debt sustainability.
DASA Names New Officials
Brazilian medical services provider DASA has named Dickson Tangerino as CEO and Cynthia Hobbs as CFO. In April, Romeu Domingues took over as interim CEO following the resignation of Marcelo Barboza, who also held the position of CFO.
Brazilian medical services provider DASA has named Dickson Tangerino as CEO and Cynthia Hobbs as CFO. In April, Romeu Domingues took over as interim CEO following the resignation of Marcelo Barboza, who also held the position of CFO.
Equity Funds Maintain Outflow
EM and LatAm equity funds saw net outflows of $1.14bn and $221m, respectively, during the week ended May 30, according to EPFR. In terms of performance, LatAm funds gained 1.4% during the week ended May 31, and are down 2.62% year-to-date, according to Lipper. EM funds rose 0.07% during the week, to bring them to a ytd gain of 0.37%. Global small and mid-cap funds, by comparison, lost 0.48% on the week, and have earned 3.90% ytd.
EM and LatAm equity funds saw net outflows of $1.14bn and $221m, respectively, during the week ended May 30, according to EPFR. In terms of performance, LatAm funds gained 1.4% during the week ended May 31, and are down 2.62% year-to-date, according to Lipper. EM funds rose 0.07% during the week, to bring them to a ytd gain of 0.37%. Global small and mid-cap funds, by comparison, lost 0.48% on the week, and have earned 3.90% ytd.
Bond Funds Continue To Leak Flows
EM debt funds booked net outflows of $464m during the week ended May 30, according to EPFR. In terms of performance, the class fell 0.69% during the week ended May 31, lowering its year-to-date gain to 2.90, according to Lipper. Global income funds gained 0.21% for the week, and are up 2.30% ytd. International income funds fell 0.03% during the week, for a 0.98% gain ytd.
EM debt funds booked net outflows of $464m during the week ended May 30, according to EPFR. In terms of performance, the class fell 0.69% during the week ended May 31, lowering its year-to-date gain to 2.90, according to Lipper. Global income funds gained 0.21% for the week, and are up 2.30% ytd. International income funds fell 0.03% during the week, for a 0.98% gain ytd.
CSA
attracts interest of Eike Batista
Brazilian businessman Eike Batista is interested in acquiring the
Brazilian steel plant CSA, Wirtschaftswoche reported without naming sources.
The German weekly claimed that Batista is willing to acquire CSA, including the
adjacent port, for a symbolic price. As previously reported, CSA is 73% owned
by the listed German industrial conglomerate ThyssenKrupp, which is looking to
sell its stake in the plant. The magazine noted rumours that Vale, the listed
Brazilian resources group that owns the remaining 27% in CSA, is also
interested in buying the stake. A recent report stated that the CSA steel plant
cost roughly EUR 6bn to build. Value USD 7,420m (CSA steel plant construction
costs) Stake Value 73%.
Source Wirtschaftswoche.
Cecrisa Revestimentos Ceramicos, a closely held Brazilian producer and
seller of porcelain and ceramic tiles, has sold 70% control to Vinci Partners,
newsweekly Veja reported.
Rio de Janeiro-based Vinci Partners, which is controlled by Gilberto
Sayao da Silva, will pay a bit more than BRL 200m (USD 98m) for the controlling
stake, Veja reported in its issue reaching newsstands this weekend without
giving a source. Cecrisa, which says on its website that it is the leader in
its market segment, sells its products through sales offices in the main
Brazilian cities and exports to approximately 50 countries. The company is
based in the town of Criciuma
Source Veja, Company website.
Internationals Continue Targeting
M&A
A recent wave of M&A
Transactions, most recently Diageo's purchase of Brazil's Ypioca, has seen
international players look to capitalize on LatAm's, and specifically Brazil's,
growth story. Continued international strategic investment, also highlighted
last week by GE buying a slice of EBX and General Mills taking Yoki Alimentos,
should be a theme in the remainder of the year, as should continued European
divestment, bankers say. There has been $64.93bn in M&A volume done this
year through May 25 from 764deals, according to Dealogic compared to $64.83bn
from 672 transactions in the corresponding period in 2011. “The increase in
volume is mainly a result of deals getting moved to this year from last year,”
says a senior new York-based LatAm investment banker. He adds that certain
large deals have moved the needle this year – the 5.63bn Abu Dhabi investment
in EBX and Itau’s move for the rest of Redecard come to mind– but might not be
indicative of a true uptick in volume. Still, strategic interest may well push
volume higher. International spirits company Diageo agreed to purchase Brazil's
Ypioca Agroindustrial Limitada, it says, for BRL900m ($454m). The move adds the
cachaca producer with 8% market share to Diageo's assets in Brazil, which
include the Nega Fulo cachaca and distribution of its well-known global brands
including Johnnie Walker, Guinness and Smirnoff. The transaction is expected to
be earnings per share neutral in year 1, and profit positive in year 5. Morgan
Stanley advised Diageo, which is also negotiating to acquire Mexico's Jose
Cuervo. In another deal, Japan's Takeda Pharmaceutical agreed to buy Brazil’s
Multilab Industria e Comercio de Productos Farmaceuticos for BRL500m cash, the
companies say. The move gives
one of Aisa’s largest drugmakers a sales network in the country where it
already has a commercial subsidiary. Multilab’s owners, Genesio Cervo and
Rejane Gobbi, will get as much as BRL40m in additional milestone payments at a
later date. Takeda was advised by JPMorgan and Multilab by BTG Pactual. In an
international exit, Spanish infrastructure group ACS revealed Monday that it
sold 7 transmission lines in Brazil for EUR423m ($529m), plus the taking on of
EUR328m in debt. ACS does not disclose the buyer. As strong as international
interest remains in the region, there are still many Europeans who need to
sell, bankers say, with other global payers and cash-stuffed Latin Americans
the likely buyers. “People are a little more cautious with the European
volatility, though this has caused some Europeans to sell assets, and we could
certainly see many more divestitures. We haven’t even scratched the surface [of
possible divestitures]” says another New York M&A banker. He notes
Telefonica as one of the larger players in a tight spot. “We will see more
divestitures. The key question is does the stream of buyers from Aisa slow
along with the global slowdown. I don’t think the trend will stop, but it does
feel like some of the demand has topped out,” he says.Vale Unloads Colombian Coal
Each ADS would be worth 3 common shares, and initially referenced by ADRs. The move comes under a a $2bn total capital increase approved last year. Cencosud has operations in Chile, Colombia, Peru, Argentina and Brazil. Its common shares closed at CLP2799 ($5.49) Monday.
Vale has agreed to sell its
Colombian coal operations to Colombian Natural Resources (CNR) for $407m, it
says. The assets include the El Hatillo coal mine and the Cerro Largo coal
deposit, as well as an 8.43% equity stake in the Fenoco railroad consortium,
and 100% of the Rio Cordoba port concession. CNR will pay cash, and the deal is
subject to regulatory approval. Vale had bought the assets from Cementos Argos
in 2009 for $306m.
Ultrapar Adds Terminal
Brazilian fuel distributor Ultrapar
has agreed to acquire the Temmar port terminal from Noble Group, it says, for
BRL160m ($80m). Under the terms of the sale, done through the Ultracargo unit,
Ultrapar could pay an additional BRL12m-BRL30m, as a result of future storage
capacity expansions in the next 7 years. The deal is subject to shareholder and
regulatory approval. Temmar is located at the Itaqui port in the state of
Maranhao. Over the last four years Ultracargo has acquired the Uniao Terminais
at the port of Santos, and another terminal at Suape in the state of
Pernambuco.
Vinci Offers Boost to PDG
Brazilian private equity firm Vinci
Partners has offered to raise up to BRL800m ($404m) for PDG Realty, PDG says,
to help shore up the homebuilder's balance sheet as it faces cost overruns,
project delays and increasing debt levels. Under the proposal, Vinci would
raise BRL800m through the sale of warrants entitling each holder to one new
share and one convertible debenture, at BRL4.02 each. This represents an 11.4%
premium to Friday's closing share price, Vinci says. The shares closed at
BRL3.78 Monday. The debentures acquired under the plan could be converted after
4 years into one additional new share at a minimum of BRL6.00 per share. Vinci
would contribute between 54.8% and 81.4% of the fresh capital under the plan
and refrain from trading the new shares it acquired for 2 years. The firm says
the preemptive rights of existing shareholders to subscribe to the transaction
would be respected. PDG's net debt was BRL5.1bn atthe end of March, versus
BRL3.2bn a year earlier.
Colombia Holds Rates
Colombia’s Central Bank has elected
to keep the benchmark interest rate at 5.25%, in line with the market’s
expectations. It notes domestic inflation levels slightly less than expected,
as wells as an increasing probability of a European recession among the factors
in its decision.
Cencosud Files ADS Sale
Chile's Cencosud plans to sell up to
$718m in ADS in an equity follow-on, according to a regulatory filing. It does
not give the timing of the sale, representing 132m common shares, to be led by
Credit Suise, JPMorgan, Morgan Stanley, UBS, Santander and BBVA. The
supermarket operator is raising funds to pay down debt, and fund the
acquisition of Jumbo Retail Argentina, in addition to general corporate
purposes.
Pague Menos Readies IPO
Brazilian pharmacy chain Pague Menos
has registered for an IPO, it says. It does not give the timing or size of the
transaction, to be lead by Banco do Brasil, Credit Suisse, Itau and Santander.
The sale includes both primary shares and secondary shares to be sold by
members of the founding de Queiros family, and is expected to raise as much as
BRL500m ($253m). The drugstore plans to spend 90% of the proceeds on opening
new stores, and 10% to build distribution centers. The retailer founded in 1981
posted BRL232.2m in Ebitda in 2011, up from BRL144.5m in 2010. The company is
also undergoing a BRL260m ($130m) local bond sale. A planned 2016 debenture
pays the DI plus 1.19%. Proceeds are marked for working capital and improving
the issuer’s debt profile. Banco do Brasil is managing the sale, done under the
rule 476 restricted format.
Banco Pine Plans CHF Bonds
Brazils’ Banco Pine plans to sell
CHF100m ($104m) in bonds in the Swiss market, according to Fitch, who assigns a
BB rating. The 2.5-year bond would be the issuer’s first in Switzerland,
according to Dealogic data. A bank spokesperson declines to comment on the
sale. LatAm issuance in Europe has slowed thanks to the increasing worry about
the Eurozone’s future. The last CHF issuer from LatAm was Santander Brasil,
with a CHF150m sale in March.
Barclays Credit Analyst Leaves
Juan Cruz has left Barclays Capital,
where he was an EM corporate credit analyst, according to a person familiar
with the matter. A spokesman at the bank declines to comment.
BB Plans RE Credit Fund
Banco do Brasil has filed to raise a
BRL400m ($202m) Fundo de Investimento Imobiliario (FII) real estate fund in
Brazil’s domestic market, according to the CVM. The
10-year vehicle will purchase real estate credit instruments, such as
certificados de recebiveis imobiliarios (CRI), Letras de Credito Imobilario
(LCI) and Letras Hipotecarias (LH). Investors will receive a spread to the DI rate, to be
determined during the bookbuilding period, from June 6 to June 26, according to
the documents. The fund can be upsized to BRL480m. Banco do Brasil is managing
the sale. Also last week, Credit Suisse Hedging Griffo filed for the BRL82.4m second
sale of shares in a FII investing in shopping malls. The deal adds to a BRL100m
fund.
Codelco CEO Steps Down
Diego Hernandez has resigned as CEO
of Codelco, the Chilean miner says, effective June 1. Thomas Keller has been
named as his replacement. Hernandez steps down for personal reasons. Keller,
who currently serves as vice president of administration and finance, has been
with Codelco since 2010 and has also held positions at Grupo Shell in Chile.
PDG Realty Empreendimentos e Participacoes (PDGR3
Brazilian listed homebuilder PDG Realty Empreendimentos e Participacoes
(PDGR3: BZ) has announced that its Chief Executive Officer received from Vinci
Partners Investimentos a corporate transaction proposal. The Proposal requires
the submission for approval, by PDG’s general meeting of shareholders, a
transaction with the following main aspects:
1) Contribution of BRL 799,980,000.00 (USD 401.5m) in the Company by
issuing 199,000,000 onerous and private warrants, giving each of them the right
of the holder thereof to subscribe (a) one (1) new share, to be issued
privately in a capital increase transaction to be implemented immediately after
the acquisition of the Warrants, and (b) one (1) convertible debenture,
convertible into one (1) share of the Company. Both the Warrants and Debentures
will be admitted to trading on organized markets.
2) The total amount of the contribution is equivalent, on a consolidated
basis, to BRL 4.02 (USD 2.01777) per share, of which BRL 4.01 (USD 2.01275) are
for capital and capital reserves (being BRL 4.00 resulting from the acquisition
of Warrants and BRL 0.01 arising from the subscription of each new share), and
the remaining balance of BRL 0.01 as debt, related to each Debenture. The price
per share of the capitalization, of BRL 4.01, is based on the weighted average
price per share by the volume traded in the last 20 trading days, with a
premium of 11.4% when compared to the closing trading price of 25 May 2012.
3) Each Debenture would be convertible, at the end of the period of 4
years from the date of issuance, in one new additional share to be issued by
the Company, against the additional payment by the Debenture holder, on the
date of conversion, of the higher amount, for each Debenture, of the following:
(a) BRL 4.00 (USD 2.00773), adjusted by the variation of the Selic rate in the
period between the date of issuance of the Debentures and the issuance and
payment of the new shares, or (b) BRL 6.00 (USD 3.01159).
Mexichem Names CEO
Mexichem has named Antonio Carrillo
as CEO, effective June 1. He will report to Ricardo Gutierrez, executive
committee president. He has previously worked at Grupo Infra, and also at
Trinity Industries, as vice president of operations. He replaces Rafael
Davolos, who moves into a more strategic role at the company, expanding
internationally. Mexichem is in the process of taking full control of Dutch
pipe maker Wavin.
Debt Funds Lose Cash
EM debt funds booked net outflows of
$478m during the week ended May 23, according to EPFR. In terms of performance,
the class fell 0.81% during the week ended May 24, bringing it to a 3.63% gain
year-todate, according to Lipper. Global income funds lost 0.42% for the week,
and are up 2.08% ytd. International income funds fell 0.48% during the week, for
a 0.97% gain ytd.
Equity Funds Continue Net Outflows
EM and LatAm equity funds saw net
outflows of $1.54bn and $527m, respectively, during the week ended May 23,
according to EPFR. In terms of performance, LatAm funds lost 1.06% during the
week ended May 24, and are down 4.06% year-to-date, according to Lipper. EM
funds fell 0.94% during the week, to pare their ytd gain to just 0.32%. Global
small and mid-cap funds, by comparison, gained 0.36% on the week, and have
earned 4.38% ytd.
Lenovo eager to make acquisitions in Brazil - Newswire Round-up
Lenovo [Lian Xiang Ji Tuan], the Hong Kong-listed Chinese computer company,
is eager to make acquisitions in Brazil to enlarge its market share in key
emerging markets, according to a newswire report. Dow Jones reported on 28 May,
citing Milko Van Duijl, Lenovo's president of Asia-Pacific and Latin America,
that Lenovo is interested in acquiring or cooperating with all players in
Brazil, but no concrete target has been identified so far.
Lenovo has a HKD 66bn (USD 8.5bn) market cap. Value USD 8,500m (market
cap).
Source Newswire Round-up.
PayRoll, a private Chilean software company, is in talks with advisers
for a potential MILA IPO by H2 2013, Chairman Hector Gomez Brain .
Chilean law firm Montt y Cia will act as legal adviser on the IPO and
PayRoll might appoint other advisors this year, Gomez said.
PricewaterhouseCoopers is its auditor.
The company provides payroll outsourcing and a range of human resource
management services such as headhunting and outplacement.
PayRoll’s shareholders are the Chilean public IT consultancy group Sonda
[SONDA.SN] with a 41% holding, Chilean economist Rodrigo Castro and his family
who own 33%, and Gomez Brain with 25%.
IPO proceeds will help the company to further improve the integration of
human resources processes in the cloud and make it scalable to enter more
markets as well as giving it the necessary funds to enter Brazil through
acquisitions, Gomez said.
The listing will depend on how MILA evolves as well as Payroll’s
performance in the Colombian market, where it is analyzing growth through
acquisitions of businesses or portfolios of customer contracts from local
companies, Gomez added.
Founded in 2005, PayRoll has operations in Argentina, Chile and Peru and
recently opened an office in Colombia. It has 500 employees and ended 2011 with
a turnover of USD 31m and EBITDA of USD 5m and no debt.
It aims to grow EBITDA by 25% before listing, Gomez said. The company
forecasts revenues of USD 38m this year and would be ready to go public with
USD 40m to USD 50m turnover and EBITDA margins of 18%.
Payroll is confident it will meet those financial goals this year,
mainly organically, since it just clinched a large contract with Banco de
Chile, Gomez said. It expects to announce two more contracts with other banks
in Chile this year.
PayRoll could also announce a small bolt-on acquisition, in Chile this
year that would widen its expertise in new business areas, but Gomez did not
want to elaborate. The company is struggling to find suitable or available
targets in other markets, Gomez said.
He ruled out Peru and Argentina for further buys and mentioned Brazil
and Colombia as markets where the company was eyeing targets. An acquisition in
those markets would only make sense if it involved a business with no less than
USD 10m turnover, Gomez noted .
Payroll entered Colombia organically this year and is now seeking ways
to accelerate growth, he said. It has identified some potential targets but it
is not convinced if they are suitable for the group. Although the company has
not ruled out the possibility, it is analyzing an acquisition of customer
contracts from a local company, rather than a full takeover, Gomez said.
Payroll’s goal is to clinch an acquisition in Brazil, the executive
said, adding that the largest companies in this market are not bigger than
Payroll. He mentioned Brazil's privately owned Toutatis as having a similar
turnover size to Payroll but said the company has not shown any willingness to
enter M&A discussions with Payroll. There are many targets available in
Brazil as most are private equity backed businesses, he added. "
Nevertheless, we are analyzing whether it is best to get listed before
approaching these companies as Brazil has proved to be a difficult market for
similar size companies than Payroll", he said. Value USD 31m
(revenues 2011).
Chocolaterie De Schutter, the private Belgian chocolate producer, would
consider M&A as a means to expand, CEO Raphael Van Brempt said.
De Schutter produces artisanal hollow chocolate, specialising in private
label Easter eggs and Santa Claus figures for retailers and chocolate makers in
Belgium and abroad.
De Schutter has revenues of EUR 3.5m and EBITDA of EUR 1m, Van Brempt
said. De Schutter expects to grow by 30%-50% in the next two-three years, he
said. The company has 30-odd employees.
De Schutter is weighing various paths to expansion, including
transitioning to branded products, Van Brempt said. Thus, De Schutter would
consider acquiring other artisanal Belgian chocolate-oriented businesses, Van
Brempt explained. De Schutter is also keen to expand into dessert production.
Desserts complement De Schutter’s core business by filling its hollow
chocolates, the CEO said. Furthermore, desserts constitute a “rapidly growing
market,” he noted. Branching out into finished products such as chocolate bars
is another possibility.
Alternatively, De Schutter may embark on diversification and
internationalisation, Van Brempt said. De Schutter would consider buying into
fruit juice makers in such emerging markets as Brazil and Peru, Van Brempt
said. The summer-oriented seasonality of fruit juice consumption would reduce
cyclicality by counterbalancing De Schutter’s focus on Easter and the
Christmas, Van Brempt explained.
Furthermore, such a transaction would give De Schutter a way to tap
increasing demand in these markets, he explained. In return, an emerging-market
company would benefit from entry into Western Europe, from De Schutter’s “Made
in Belgium” imprimatur, and from access to De Schutter’s craftsmanship, he
said.
De Schutter will rely on in-house expertise and the advice of retained
auditor KMPG to assess and acquire targets, Van Brempt said. De Schutter can
finance expansion autonomously, Van Brempt said, citing its strong cash flow
and EBITDA margin of 30%.
Van Brempt acquired De Schutter from its eponymous founding family
earlier this century.
As regards De Schutter’s own long-term ownership structure, Van Brempt
said he foresees leading the company’s expansion in coming years and has
accordingly turned down regular approaches by sector players. Still, the need
to safeguard continuity for De Schutter’s staff means the company must consider
attractive bids, Van Brempt said: “the employees’ interests come first.”
Van Brempt spoke to this news service at the PLMA “World of Private
Label” 2012 trade fair in Amsterdam. Value USD 4m (Revenue of Chocolaterie De
Schutter).
Transpetro
Transpetro, the shipping unit of state-run Petroleo Brasileiro (Bovespa:
PETR4) suspended an order for 16 oil drilling ships with Estaleiro Atlantico
Sul, Brazilian newspapers reported. The order with shipyard Estaleiro Atlantico
Sul is for BRL 5.3bn (USD 2.7bn), Valor Economico reported today, citing a
statement of the listed oil company known as Petrobras.
Transpetro gave Estaleiro Atlantico Sul until 30 August to find a
technological partner, Rio de Janeiro-based newspaper O Globo reported, citing
Sergio Machado, president of the Petrobras subsidiary. A partner is needed to
substitute Samsung Heavy Industries, which pulled out of the shipyard venture
in the middle of March, according to the reports. A partner to supply naval
technology "is indispensable" for achieving productivity in the
shipyard, Machado said, according to Jornal do Commercio in a report it
published in April.
Estaleiro Atlantico Sul, a shipyard controlled by closely held Brazilian
engineering and construction companies Camargo Correa and Queiroz Galvao,
delivered the oil tanker Joao Candido to Transpetro on 25 May, almost two years
behind schedule, Valor reported in its story today.
The new technology partner for Estaleiro Atlantico Sul should have a 30%
stake, Valor and O Globo both reported in their stories.
The most advanced negotiations for a new partner in the shipyard to
replace Samsung Heavy Industries are with Japan’s Ishikawajima-Harima Heavy
Industries, or IHI, O Globo reported, citing unidentified sources. Valor didn’t
name potential new partners in its story today.
Value USD 2,700m (size of suspended order). Stake Value 30%.
Source: Valor Economico, O Globo.
Vale
Vale, (Bovespa: VALE5), the world’s largest iron-ore producer, agreed on
Monday to sell its coal assets in Colombia for USD 407m, Valor Economico
reported. The buyer is CPC, a subsidiary of Colombian Natural Resources, Valor
reported in the online story, citing the Brazilian listed company for the
information.
The sale includes 100% of the El Hatillo mine and the Cerro Largo
deposit, based in the department of Cesar in northern Colombia. The sale also
includes 100% of the port Sociedad Portuaria Rio Cordoba on the Atlantic coast
of Colombia, according to Valor.
The sale of the thermal coal assets in Colombia is part of efforts to
optimize the company’s portfolio of assets, Vale said in a statement. Valor
reported. The plan that Vale had in Colombia ended up "not functioning,"
newsweekly Veja reported in an online story on 18 May, citing Murilo Ferreira,
president.
The sale includes 8.4% of the railroad Ferrocarriles del Norte, which
linked the mines in Colombia to the port, Valor reported in its story today.
Value USD 407m (announced price)Stake Value 100%.
Source: Valor Economico, Veja.
Banco Bradesco
Banco Bradesco (Bovespa: BBDC4), Brazil’s second-largest non-state bank,
is near closing an agreement to buy the businesses of Banco Santander in
Brazil, O Globo reported. Such an acquisition would enable Bradesco to become
the largest bank in Brazil, surpassing government-run Banco do Brasil (Bovespa:
BBAS3), the biggest lender in the country, and Itau Unibanco (Bovespa: ITAU4),
Brazil’s largest non-state bank, O Globo reported.
The Rio de Janeiro-based daily did not give any sources for the
front-page report that Bradesco is near an agreement to buy Banco Santander
(Brasil). It cited balance statements of the banks involved for the market
ranking, should Bradesco buy the Brazilian unit of the Spanish bank.
The Spanish bank has repeatedly iterated that it doesn’t intend to leave
Brazil, its most profitable market. Banco Santander (NYSE: STD), the listed
Spanish bank, isn’t planning to leave Brazil, Emilio Botin, chairman, told
newsweekly IstoE Dinheiro. Brazil has more and more importance to Santander,
Botin said, according to the weekly business publication in an interview
published earlier this month.
The Spanish bank, though, could sell a stake of between 30% and 40% in
its Brazilian unit, O Globo reported in its story this weekend, citing the
first information that circulated by unidentified market sources. Such a stake
could be worth BRL 64bn (USD 32bn), according to the report.
Banco do Brasil negotiated to buy a stake but talks stopped on lack of
agreement on price, according to O Globo. The interest of Banco do Brasil in
buying a 49% stake in the Brazilian unit of the Spanish bank was opposed by
Brazil’s President Dilma Rousseff, O Globo reported, citing an earlier report
in daily newspaper O Estado de S. Paulo. President Rousseff had viewed such an
acquisition as increasing market concentration, O Globo reported.
Banco Bradesco declined comment and Banco Santander could not be
reached, O Globo reported.
Value USD 32,000m (reported though unconfirmed worth of stake) Stake
Value 40%.
Source: O Globo, IstoE Dinheiro.
Ultrapar Participacoes
Ultrapar Participacoes (UGPA3: BZ; UGP: NYSE) announced that it has
signed, through Ultracargo, a sale and purchase agreement for the acquisition
of 100% of the shares of the company Temmar - Terminal Maritimo do Maranhao
from Temmar Netherlands and Noble Netherlands, subsidiaries of Noble Group
Limited. The acquisition value is BRL 160m (USD 80.3m), subject to the
customary working capital and indebtedness adjustments on the closing date.
Additionally, Ultrapar will disburse a minimum extra value of BRL 12m
(USD 6m), which may reach approximately BRL 30m (USD 15m) as a result of
possible future expansions in the storage capacity of the terminal, provided
that such expansions are implemented within the next 7 years.
Temmar is a modern and well-designed terminal in the port area of
Itaqui, in the state of Maranhao, in the Northeast region of Brazil, with a
capacity of 55 thousand cubic meters and used mainly for the handling of fuels and
biofuels. Temmar has contracts with its clients for the entire capacity of the
terminal and a longterm lease contract, which includes a large area for future
expansions.
The port of Itaqui is the second largest port in liquid bulk handling in
Brazil, with privileged location and efficient logistics, which includes access
to railway. Responsible for supplying the fuel market in the states of
Maranhao, Piaui and Tocantins, where fuel consumption has grown above the
national average, the Itaqui port region has attracted various investments and
new projects.
This acquisition marks the entry of Ultracargo in this important market
and enhances its operational scale, strengthening its position as a provider of
storage for liquid bulk in Brazil and adding 8% to the company’s current
capacity.
The closing of this acquisition is subject to the compliance with
certain usual conditions precedent for this type of transaction, notably the
opinion of port authorities and, if applicable, the approval by a general
shareholders’ meeting of Ultrapar. In the event the shareholders’ meeting is
required and the acquisition is not approved, Ultrapar will pay to the seller a
break-up fee of BRL 3m (USD 1.5m).
The company hereby clarifies that the acquisition of Temmar will not entitle
Ultrapar’s shareholders to withdrawal rights, pursuant to paragraph 2 of
Article 256 of the Brazilian Corporate Law. This transaction will be submitted
to the competent regulatory authorities. Value USD 80m (deal value) Stake
Value 100%.
Source: Company Press Release(s).
Farmacias Pague Menos
Farmacias Pague Menos, Brazil’s third-largest drugstore chain, is
studying selling shares in an initial public offering in July, Valor Economico
reported Monday. The board of Pague Menos, based in Fortaleza, the capital of
the northeastern Brazilian state of Ceara, has approved the IPO, Folha de S.
Paulo reported Saturday.
Folha and Valor both reported that Pague Menos had filed with Brazil’s
federal securities regulator CVM to carry out the IPO. Banco Itau BBA is the
coordinating leader on the IPO while Credit Suisse and BB de Investimento are
acting as underwriters, according to the two newspapers.
The IPO in July will depend on market conditions, according to Sao
Paulo-based business daily Valor. Pague Menos will sell shares in the IPO in
the second half of July only if the Brazilian equity market improves. The
benchmark Bovespa index of the most-traded shares on the Sao Paulo Stock
Exchange has lost 4% this year.
The shares are to be listed on the Novo Mercado, or new market, segment
of the bourse, Valor reported. The Novo Mercado has higher corporate governance
standards and will accept only common, or voting, shares for listing.
Source: Valor Economico, Folha de Sao Paulo.
Azul Linhas Aereas Brasileiras
Azul Linhas Aereas Brasileiras is expected to announce today its
purchase of Trip Linhas Aereas, South America’s largest regional airline, Folha
de S. Paulo reported. The acquisition will raise the market share of Azul to
14%, Folha reported today without giving a source for its information.
The two airlines are expected to announce a merger today in which Azul
will have 67% of the company resulting from the combination, Valor Economico
reported today, citing unidentified sources in the industry, following the
negotiations.
Azul Linhas Aereas had a 9.8% share of Brazil’s domestic aviation market
in March, up from 7.6% in the same month a year ago, Folha reported, citing
federal aviation agency Anac and the company for the information. Azul, the
Brazilian airline started by JetBlue Airways founder David Neeleman in 2008,
will have 80% of the company resulting from the merger, according to Folha in
its report.
Valor reported that Trip is 20% owned by SkyWest, a US airline. Azul
didn’t return a call seeking comment, according to the Sao Paulo-based business
daily. Trip did not confirm the transaction.
Tam (Bovespa: TAMM4), Brazil’s largest airline, will lose from the
merger as its code-sharing agreement with Trip should be canceled, according to
Folha in its report on the merger expected to be announced today.
The merger, which took the industry by surprise, should be described by
the two companies in a press conference this afternoon, Valor reported. Stake
Value 67%.
Source: Folha de Sao Paulo
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