The biggest cement producer in Brazil, Votorantim Cimentos SA is expected to move around with an initial public offering as it is trying to raise at least $3.7 billion of cash. The cement producer and its parent company are planning to offer 400 million units for a listing in the Sao Paulo or the equivalent of the same in the American depository receipts in New York, as far as the regulatory filing is concerned. Each of the units will be priced at 16 to 19 Reais. On the other hand, the ADRs (These are equivalent to a couple of shares) will be offered for a price of $15.59 to $18.51, as mentioned in the filing.
Votorantim Cimentos, is the 8th largest cement producer in the world and it has factories in Latin America, India, US, Turkey and China. The company is planning to use the proceeds from the sale for expanding outside Brazil and also make some proper acquisitions. The company is expected to follow the paths of Banco do Brasil SA and Alupar Investimento SA – both aiming to complete the respective IPOs within this year itself.
The benchmark stock gauge of Brazil, Ibovespa index experienced a decline of 9.6% in 2013. Despite of the fact, Votorantim Cimentos, founded in 1933, is going ahead with the IPO plans. The Brazilian Government has already started to intervene into sectors such as energy, utilities and banking – thereby crimping the earnings. Apart from all these, the growth in Brazil has slowed down as well.
A total of400 million units will be offered as part of the IPO. Out of those, 285.7 million will be sold by Votorantim Cimentos, whereas, the remaining 114.3 million will be sold by the Votorantim Industrial SA. These details have been mentioned in the regulatory filing. As stated in the same, every single unit of Votorantim Cimentos is equal to a common share and 2 other preferred shares.
The ADRs will be listed on the New York Stock Exchange and the symbol used for this purpose will be VEBM. The common stocks which will be listed on the Sao Paulo Stock Exchange will have the symbol VEBM3. The entire sale process is being managed by 5 different companies: Banco Itau BBA SA, Morgan Stanley, JPMorgan Chase & Co., BTG Pactual SA and Credit Suisse Group AG.