SÃO PAULO, Brazil â€" Brazil’s largest cement producer, Votorantim Cimentos, is planning to raise as much as $4.8 billion in what would be one of the largest initial public offerings worldwide this year.
The move is a positive sign for Brazil as the country’s government and private sector have been trying to encourage more financing through the public markets.
The company filed a preliminary prospectus Friday, saying it would offer up to 540 million units, priced at 16 to 19 reais a share. If all the units were sold at the maximum price, the company would raise 10.26 billion reais, or $4.8 billion.
After a weak 2012, in which only three Brazilian companies held I.P.O.’s, the country’s capital markets are recovering. Six I.P.O.’s have been held in Brazil in 2013.
The largest global I.P.O. was also in Brazil, according to Thomson Reuters, when the insurance giant BB Seguridade raised $5.74 billion at the end of April. If successful, Votorantim Cimentos’s I.P.O. would rank as the second-largest globally so far this year.
Votorantim Cimentos’s units will be offered on both the BM&F Bovespa stock exchange in São Paulo and on the New York Stock Exchange, with each unit representing one common share and two preferred shares. The pricing will be announced June 19 and trading should begin June 20.
Itaú BBA, Morgan Stanley, JPMorgan Securities, Credit Suisse, BTG Pactual, HSBC, Goldman Sachs, Deutsche Bank, Banco Bradesco BBI, Bank of America Merrill Lynch, Banco do Brasil and Banco Votorantim are underwriting the offering.
According to the prospectus filed with the S.E.C., the company will use 45 percent of the money raised to finance its growth and potential acquisitions, in Brazil and abroad.
Votorantim Cimentos has operations in 20 countries, including the United States, but the vast majority of its business is in Brazil, whose booming real estate and construction sectors have benefited the company.
This success has come despite economic weakness in Brazil, where inflation is forecast at nearly 6 percent and the economy only grew at a 2.2 percent pace in the first quarter.
But after 2012’s I.P.O. drought, investor appetite appears strong for Brazilian companies, especially ones that have dominant positions in relatively strong sectors of the economy.
Votorantim Cimentos will be the only Brazilian cement producer traded on the stock market, so its shares may prove attractive to investors eager to participate in the sector. The company is a subsidiary of Votorantim Industrial, one of Brazil’s largest conglomerates, which had $11.5 billion in revenue last year.
Votorantim Industrial’s other operations include steel and other metals, cellulose, agriculture, energy, and even finance, but Votorantim Cimentos is one of the crown jewels, responsible for $4.7 billion in revenue.
Like many Latin American companies, Votorantim Industrial is controlled by its founding family. Its chairman Antônio ErmÃrio de Moraes is worth an estimated $12.7 billion, making him the 74th richest person in the world and the third richest in Brazil according to Forbes Magazine.
Even after this I.P.O., Votorantim Industrial and Mr. ErmÃrio de Moraes should continue to own enough shares to maintain control of Votorantim Cimentos.
