Votorantim Cimentos unveils terms of IPO, Brazil

Brazil’s leading cement producer, Votorantim Cimentos, has announced terms of its initial public offering (IPO) to fund further expansion, acquisitions and improvements in efficiency.

In a preliminary prospectus, the company expects to sell 400 million units, with each unit expected to price between BRL16 (US$7.80) and BRL19. Each unit consists of one common share and two preferred shares.

It will also offer American depositary shares that will be listed on the New York Stock Exchange under the symbol VEBM. The company said it expects each ADS to price between US$15.59 and US$18.51.

Of the total to be sold, 285 million shares will be via a primary offering and the rest will be sold by the company's controller through a secondary offering. The company didn't offer a breakdown of how many shares will be offered in Brazil and how many will be offered in the US.

Votorantim Cimentos said it expects to raise US$2.86bn from the primary offering, including a possible overallotment.  It plans to use US$1.06bn of the proceeds to continue with its cement expansion strategy and diversification of its portfolio of products in Brazil, as well as for potential acquisitions of heavy building materials companies or assets outside Brazil. In addition, the company will use US$946m to reinforce its working capital, and about US$354.7m will go for "strategic investments to further improve the efficiency of our operations."

Morgan Stanley, JPMorgan Chase, Itau BBA, Credit Suisse, BTG Pactual, HSBC, Goldman Sachs, Deutsche Bank, Bradesco BBI, Bank of America Merrill Lynch, Banco do Brasil and Banco Votorantim will coordinate the offering.