Caixa Econômica Federal announced earlier this year the intention to list its subsidiaries in order to increase the volume of capital markets. According to Valor Econômico newspaper, initial public offerings (IPOs) of insurance, card, lottery and asset management companies are expected to take place at both B3 in São Paulo and at NYSE in New York .Both IPOs are expected to happen in the second half of this year.
With the initiative of the double listing of the shares of its subsidiaries, the state company seeks greater liquidity and better pricing for the shares. The higher trading volume should also attract more investors. Listings will be made as American Depository Receipts (ADRs), Level 3, the most complete level of operation. The subsidiaries will comply with a series of regulatory requirements and will obtain effective local funding, in the same type of issue already held by Petrobras and Embraer in the United States.
Caixa still needs to define the percentage to be sold and the demand of investors, so there is no way to define the value to be traded in the IPOs. Analysts estimate that the four operations should move between US$7.65bn US$10.2bn.
Prior to the subsidiaries' IPOs, Caixa Econômica Federal also prepares a follow-on of the state bank's assets. The goal of President Pedro Guimarães is that the company collects close to US$3.8 billion with operations until June. The first of these was the sale of shares of reinsurer IRB Brasil. Caixa already informed Petrobras about the desire to sell its stake in the company. According to Valor Econômico newspaper, the contracted banks work to carry out the follow-on from the third week of May.
Other Brazilian state-owned companies also have ADR trading, but level 1 and 2, such as Banco do Brasil and BB Seguridade.
Source: GMB / Valor Econômico
