IRB Brasil IPO suspended as market turmoil worsens, source says
BRASILIA Oct 6 (Reuters) - IRB Brasil RE SA, the nation's largest reinsurer, has decided to postpone an initial public offering indefinitely after market turmoil in Latin America's largest economy intensified in recent weeks, a source with direct knowledge of the situation said on Tuesday.
The investment banks managing the initial public offering of IRB Brasil, some of which happen to be shareholders of the Rio de Janeiro-based company, had agreed that suspending the deal was the only feasible option at this point, said the source, who requested anonymity since the plans remain private.
The former reinsurance monopoly is now controlled by Brazil's largest local banks and the government. The deal is being managed by the investment-banking units of Banco do Brasil , Banco Bradesco SA and Itaú Unibanco Holding SA, with JPMorgan Chase & Co acting as a global underwriter.
A press representative for IRB Brasil declined to comment.
The likelihood that the IPO would take off had fallen continuously over the last quarter after a 15 percent tumble in the benchmark Bovespa stock index and a 27 percent slump in the Brazilian real discouraged investors from buying new issues.
Stung by dozens of deals that failed to deliver promised returns in recent years, money managers have become increasingly cautious about Brazilian offerings. In 2014, only one company went public in the country, the worst performance for domestic IPOs in 11 years. (Reporting by Aluisio Alves; Writing by Guillermo Parra-Bernal and Asher Levine; Editing by Cynthia Osterman)
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