Brazil's largest shopping mall operator BRMALLS Participacoes said on Tuesday it planned to offer 48.45 million shares in primary and secondary sales, raising cash to finance expansion and takeovers and to pay down debt.
The company announced in the Valor Economico newspaper that it would offer 30.28 million shares in the primary offering and 18.17 million shares in the secondary offering. BRMALLS did not disclose a price range for the shares, but on June 10, it said the sale might reach as much as 800 million reais.
The offering may increase by 16.96 million shares if underwriters exercise a so-called greenshoe option to sell additional shares to meet demand.
BRMALLS said 55 percent of proceeds of the stock sale will be used to buy stakes in shopping malls, with 25 percent of the funds set aside for expansion of its existing malls and 15 percent going to increasing its interests in shopping centers in its portfolio. The company owns stakes in 34 shopping malls across the country.
BRMALLS said three of its shareholders also plan to reduce their stakes in the company with the secondary offering. GP Investimentos, Latin America's largest private equity company, will reduce its holding to 8.8 percent from 14.4 percent, while BRMALLS Chairman Richard Paul Matheson will trim his portion to 7 percent from 11.5 percent.
Dyl Empreendimentos e Participacoes, a holding company for the founders of shopping mall builder ECISA, will also cut its stake to 7 percent of BRMALLS from 11.5 percent.
BRMALLS, which hired the investment banking unit of Itau Unibanco to manage the stock sale, expects the bookbuilding for the offering to end on July 1.
BRMALLS shares rose 1.2 percent on Monday, compared with a 3.7 percent slump in the benchmark Bovespa index .BVSP. The stock has surged 83.5 percent so far in 2009, compared with a 31.8 percent gain in the Bovespa.
(Reporting by Elzio Barreto, Editing by Maureen Bavdek)