UPDATE 3-Mexican dairy company Grupo Lala plans IPO

Mon Sep 23, 2013 2:16pm EDT

MEXICO CITY, Sept 23 (Reuters) - Mexican dairy company Grupo Lala, one of the biggest in Latin America, said on Monday it plans to launch a long-awaited initial public offering of shares internationally.

Mexican companies are selling shares at unprecedented rates even as the wider economy slows, breathing new life into what has historically been a limited stock market.

Lala plans to use proceeds from the IPO to expand its distribution and prepay some bank debt. It also may consider acquisitions to expand in Mexico, Central America and abroad, according to a prospectus filed with Mexico's stock exchange.

Lala's IPO could raise around $600 million, a banker told IFR, a Thomson Reuters company.

The dairy company said it had revenue of 40.345 billion pesos ($3.16 billion) and core profit, or earnings before interest, taxes, depreciation and amortization, of 4.764 billion pesos in 2012.

Lala has just over half of Mexico's market for milk and cream and about a third of the market for pre-packaged cheese, according to AC Nielsen figures cited by the company.

The company has 17 production plants and 161 distribution centers across Mexico and Central America.

Lala, which earlier this year spun off its U.S. business known as Borden Dairy, did not say how much it plans to sell in the offering or when it might set a price.

JPMorgan, Morgan Stanley and BBVA Bancomer are bookrunners on the Lala offer, the prospectus said.

Mexican companies have been issuing equity capital at an record rate this year, raising more money than in the previous four years combined.

Companies and real estate investment trusts have raised $9.8 billion year-to-date, according to Thomson Reuters data.

Separately, Mexican investment bank Banco Interacciones on Friday said it is planning an initial public offering to improve its capital structure and fund expansion plans.

Banco Interacciones and Lala will be the eighth and ninth IPOs this year in Mexico.

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