BNDES vows $1.35 bln to bolster Brazil buyout sector, Valor says

BRASILIA/RIO DE JANEIRO, April 15 Tue Apr 15, 2014 7:54am EDT

BRASILIA/RIO DE JANEIRO, April 15 (Reuters) - Brazil's state development bank BNDES plans to spend up to 3 billion reais ($1.35 billion) buying stakes in buyout investment vehicles and share offerings of mid-sized companies, to help foster new funding sources in local capital markets, Valor Econômico newspaper reported on Tuesday.

The program, which is expected to last two years, will be carried out by BNDES's investment holding company BNDESPar, Julio Ramundo, a senior vice president at BNDES, told Valor in an interview.

Under the plan, BNDESPar could buy no more than a 40 percent stake in start-ups through initial public offerings whose proceeds go entirely to the company, Valor reported.

Officials at BNDES's media office in Rio de Janeiro were not immediately available to confirm Ramundo's comments to Valor. Ramundo plans to unveil the plan at a private-equity industry conference in Rio on Tuesday.

About 2 billion reais of the BNDES money could be funneled into investment vehicles managed by private-equity and venture capital firms in Brazil, with focus on technology, healthcare and innovation activities that range from culture and entertainment as well as videogames, Valor added. The bank wants also to deploy part of that money into infrastructure project, the paper said, citing Ramundo.

Currently, BNDES, which is considered as Brazil's biggest source of long-term corporate loans, has about 2.5 billion reais invested in 34 similar investment vehicles, known in Brazil as "fundos de participações."

The remaining 1 billion reais is expected to go toward share offerings of smaller companies in financial bourse BM&FBovespa SA's Bovespa Mais listing chapter for companies with small market capitalization, Valor added. BNDES could also purchase shares of already-listed companies in the Bovespa Mais segment to bolster liquidity, the newspaper added.

($1 = 2.21 Brazilian reais) (Reporting by Silvio Cascione and Guillermo Parra-Bernal, Editing by W Simon)

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