Utility Companhia Paranaense de Energia was privatized as its controlling holder, the Brazilian state of Parana, shed its stake in a 5.2 billion-real ($1.1 billion) equity offering.
(Bloomberg) — Utility Companhia Paranaense de Energia was privatized as its controlling holder, the Brazilian state of Parana, shed its stake in a 5.2 billion-real ($1.1 billion) equity offering.
Copel — as the company is known — and the state government sold a combined 549,171,000 common shares at 8.25 reais a piece, company said in a regulatory filing. That brings the state’s stake on Copel’s voting stock to below 50%, down from 70% prior to the sale.
An additional allotment of 82,375,650 shares was also fully sold at the same price, according to people familiar with the matter, who asked not to be named discussing private information. That brings the total raised to 5.2 billion reais — Brazil’s second biggest share offering this year, trailing only BRF SA, which raised 5.4 billion reais in a sale last month.
Copel didn’t reply to requests seeking comment.
Investors including GQG Partners LLC, Zimmer Partners, SPX Capital and Radar, which were all in early talks to anchor the transaction, bought shares. Singapore’s sovereign wealth fund GIC also participated.
Banks running the deal were Banco BTG Pactual SA, Banco Itau BBA SA, Banco Bradesco BBI SA, Morgan Stanley and UBS BB Investment Bank.
The transaction adds to a recent wave of privatizations in Brazil. Last year, Eletrobras — Latin America’s biggest utility — was sold in a blockbuster deal, while the Sao Paulo state recently unveiled the broad guidelines of a potential privatization of water utility Sabesp.
Preferred shares of Copel were up 1.3% to 8.75 reais as of 11:10 a.m. New York time, on track to close at the highest on record.
The utility “has been undergoing a turnaround process for at least four years now,” Citigroup Inc. analyst Antonio Junqueira wrote in a note. “This ongoing process should become easier with the company now becoming a private sector entity,” he said, raising the price target for the preferred shares to 12 reais.
–With assistance from Danielle Chaves.
(Updates with details on buyers in fifth paragraph, updates stock move in eighth paragraph.)
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