UPDATE 1-Brazil's Metalúrgica Gerdau could raise $319 mln in offering

jueves 29 de octubre de 2015 09:07 GYT
 

(Updates with details throughout)

SAO PAULO Oct 29 (Reuters) - Metalúrgica Gerdau SA , the Brazilian investment holding company that controls steelmaking group Gerdau SA, could raise about 1.24 billion reais ($319 million) from investors in a private transaction to help repay debt.

In a securities filing, the company said the so-called restricted-effort offering involves the sale of about 169 million common and 331 million preferred shares. Pricing, which will depend on the fixing of a fair price and demand for the issuance, is expected as early as Nov. 17, the filing said.

The plan comes as the Gerdau group, like rival steelmakers in Brazil, grapples with a high debt burden that has grown substantially because of the drop in the real - Brazil's currency has lost about one-third of its value against the U.S. dollar this year.

Proceeds could be used to repay debt that Porto Alegre, Brazil-based Metalúrgica owes to Grupo BTG Pactual SA , the largest independent investment bank in the country.

The Gerdau Johannpeter family, which controls Metalúrgica, will participate in the offering, which will be underwritten by BTG Pactual and a group of four other banks, the filing added.

Shares of Metalúrgica Gerdau are down 74 percent this year, in line with other steelmaker shares that are being hammered by the impact of slowing growth in China, declining iron ore and steel prices and Brazil's worst recession in a quarter of a century.

Metalúrgica Gerdau's common shares advanced 2.4 percent on Thursday, while its preferred shares rose 2.6 percent.

Public offerings with restricted efforts differ from standard equity offerings in that a company does not have to request registration of the plan with securities industry watchdog CVM, only qualified investors can participate, and the deals cannot be marketed through road shows or the media.

($1 = 3.9450 Brazilian reais) (Reporting by Guillermo Parra-Bernal; Additional reporting by Walter Brandimarte in São Paulo; Editing by Paul Simao)