UPDATE 1-Taesa raises $873 mln as IPO prices within range
* Taesa, shareholders sell all 27.000 units on offer
* IPO prices within 60 reais-70 reais suggested range
* 4th IPO priced in tough year for market
SAO PAULO, July 19 (Reuters) - Transmissora Aliança de Energia Elétrica, a unit of power holding company Cemig , raised on Thursday 1.76 billion reais (US$873 million) in an initial public offering, an indication of the growing appeal of energy deals in Latin America's largest economy.
Taesa, based in Rio de Janeiro, and shareholders including Cemig and investment fund FIP Coliseu sold a combined 27 million units at 65 reais a piece, the mid-point of the suggested range, according to information on the website of securities regulator CVM. A unit is comprised of one common share and two preferred shares.
Three other Brazilian IPOs had successfully priced this year, showing caution regarding the once-hyped market. Pricing of the Taesa deal came the same day that global commodities firm Louis Dreyfus Corp had to scrap IPO plans for its local sugar and ethanol unit Biosev because of faltering demand for the issue.
IPOs, seen for most of the last decade as a symbol of Brazil's buoyant capital markets, have languished the past two years as prices sank for many names that went public. While most markets have gradually recovered from the global financial crisis, IPOs remain out of favor.
In the case of Taesa, investors who participated in the deal said they were attracted to it because of its stable, predictable revenue streams, the support of Cemig as a main shareholder and its operating licenses are recent and so not due to expire any time soon.
"To me it's like investing in a fixed-income instrument, and that is rather good in such an uncertain environment for equities in Brazil," said a Rio de Janeiro-based investor who participated in the deal, but declined to be named.
A source with knowledge of the deal said that bids for the stock were more than three times as big as the amount of shares on offer. A great portion of investors in the transaction were Brazil-based in contrast to the major role that foreign investors traditionally have in Brazilian share sales.
Four companies, including energy firm CPFL Energias Renováveis, are filing for IPOs in Brazil, in an indication that deals in the sector are getting investors' attention. Shares for the three companies that sold shares this year are trading below or near their IPO prices.
Taesa hired the investment-banking units of BTG Pactual , Goldman Sachs Group, Banco Santander , Banco do Brasil and Bank of America to manage the transaction.
The stock is slated to begin trading on Monday under the symbol "TAEE11."
- Tweet this
- Share this
- Digg this