* Blackstone, Patria to pay $657 million for 70 percent
* Deal to help Gafisa reduce debt burden, boost investment
* Purchase subject to regulatory approval
By Asher Levine
SAO PAULO, June 7 Brazilian homebuilder Gafisa
SA agreed to sell a 70 percent stake of its high-end
Alphaville unit to private equity firms Blackstone Real Estate
Advisors LP and Patria Investimentos Ltda, according to a
securities filing on Friday.
Under the deal, Blackstone Group LP and Patria agreed
to pay 1.4 billion reais ($657 million) in cash for the stake.
Gafisa, which had held 80 percent of Alphaville, also said
it had acquired the remaining 20 percent from the company's
founders for 367 million reais, leaving it with a 30 percent
stake after the transaction.
In October 2011, Gafisa embarked on a turnaround after a
rapid expansion into unfamiliar markets led to huge cost
overruns, sales cancellations, big quarterly losses, and a debt
burden among the highest in Brazil's construction sector.
Selling the stake in Alphaville, Gafisa's most profitable
unit, will help the company reduce its
debt-to-shareholder-equity ratio from 94 percent at the end of
the first quarter to about 53 percent, according to the filing.
The private equity firms will maintain Alphaville's
management team, the filing said, and Gafisa will hold two spots
on the company's six-seat board.
The transaction is subject to regulatory approval, which
Gafisa expects to occur by the end of the year.