LatinFinance - January/February 2015 - 7

NEWS
EQUITY

New listings emerged from Mexico, while Brazilian issuers
are hopeful for an improvement in 2015 after a troubled
end to 2014. By Eduardo García

Picking up
Latin American equity
markets had a subdued end
to the year, with Brazilian
issuers still notably absent.
The market welcomed the
nomination of Joaquim
Levy as Brazilian finance
minister in late November but
investigations into corruption
allegations at Petrobras sent
the market into disarray
once again. The Bovespa
stock index fell 8.5% from the
start of November to endDecember.
Volatility from the
Petrobras affair may have
been partly to blame for
Restoque Comércio e
Confecções de Roupas'
decision to call off its 431
million real ($168 million)
equity follow-on. The deal
had been set to be Brazil's first
equity private placement,
under the local securities
regulator's recently expanded
Instruction 476.
Market participants
hope deals under the new
procedures - similar to an
accelerated book build - will
make it easier for companies
to raise equity in smaller,
more nimble deals than
previously possible. Despite
the deal being pulled, the
new framework remains
"conceptually a good idea",
but best suited to large, liquid
and well-covered stocks, a
source told LatinFinance.
Mexico continued to be
more active, with water
facilities provider Rotoplas

pricing an oversubscribed IPO
in early December, raising 4.18
billion pesos ($289.8 million) in
a transaction that was driven
by international demand. Bank
of America-Merrill Lynch,
GBM, Goldman Sachs and
Santander were bookrunners.
The company sold 144.2 million
shares, including 125.4 million
in the base deal, plus a 15%
greenshoe. Rotoplas priced the
shares at 29 pesos each, toward
the lower end of its 28 to 34
peso target range.
Also in Mexico, Fibra MTY
raised 2.01 billion pesos ($136
million) through an initial
public offering of 167.7 million
certificates. Bookrunners
Actinver and Scotiabank priced
the certificates at 12 pesos
each, at the lower end of a 12
to 13 peso target range. The
IPO included a 15% greenshoe
option.
In Chile, packaging
company Tech Pack raised
nearly $150 million through
a follow-on equity offering in
November, meeting its goal
to issue 301.65 million shares.
Controlling shareholder
Quiñenco bought $98.7 million
worth of the new stock,
maintaining its 65.9% stake in
Tech Pack.
And in Colombia, Banco
de Bogotá raised 1.5 trillion
pesos ($725 million) through a
preferential follow-on offering
in mid-December. The lender
sold 23.8 million ordinary
shares to existing shareholders
at 63,000 pesos each.

ECM rank by volume, full year 2014
Morgan Stanley ahead
Rank
1
2
3
4
5
6
7
8
9
10

Bookrunner
Morgan Stanley
Citi
Credit Suisse
Grupo Aval
Itaú BBA
BTG Pactual
JPMorgan
Goldman Sachs
Bancolombia
BofA Merrill Lynch

# Deals
7
13
14
2
13
14
13
7
1
10

21,544

Total

Value $m
2,362
2,054
1,974
1,851
1,771
1,146
1,121
1,101
1,085
1,065

62

Source: Dealogic

Looking forward

Despite the gloom, there were
signs of a potential pick-up in
activity in the Brazilian stock
market for 2015, while issuance
could continue to flow from
elsewhere, particularly Mexico.
Brazilian airline Azul
mandated for a primary and
secondary IPO of preferred
shares. Capital raised from
the primary portion will go
to fleet investment and route
expansion, according to a
regulatory filing on December
1. Meanwhile, Telefônica Brasil
- known as Vivo -is looking
to fund its pending $10 billion
acquisition of broadband
provider GVT with a followon equity sale, bankers said.
Brazilian mining giant Vale is
studying an IPO of a minority
stake in its base metals unit on

the Toronto stock exchange its
chief executive Murilo Ferreira
said in December. Vale has not
yet decided on the carve-out
and is also considering a sale
of preferred shares to raise
capital, Ferreira said. The listing
would be part of Vale's efforts
to become "more lean and
efficient", which would help the
company cope with a period of
low commodity prices.
In Colombia, Grupo Argos
is set for a follow-on share sale
in the first quarter that could
raise around 1.06 trillion pesos
($500 million) after the board
approved the plans in early
November. And in Mexico,
Grupo Alfa could raise around
$1.2 billion equivalent after the
company approved a follow-on
sale of 400 million new shares
in early November. LF

January/February 2015 - L ATINFINA NCE.COM 7
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