UPDATE 1-BTG Pactual outlines plan for commodities arm spinoff

miércoles 29 de junio de 2016 08:21 GYT

(Adds details on spinoff terms, background)

BRASILIA, June 29 (Reuters) - Grupo BTG Pactual SA , Latin America's largest independent investment bank, will issue a different class of shares as part of a plan to spin off its commodities trading unit, according to a securities filing on Wednesday.

The plan calls for the company's Banco BTG Pactual SA subsidiary to create three types of shares that Grupo BTG Pactual investors will receive as their stake in the recently renamed commodities unit, Engelhart CTP SA.

Investors could convert those shares into so-called units of Grupo BTG Pactual, the bank's most-traded class of stock. The plan is subject to regulatory and shareholder approval, the filing said.

The proposal comes almost three months after BTG Pactual decided to separate the fast-growing commodity sales and trading arm, rename it and make it independent. The decision came after a rapid downsizing triggered by the arrest of founder André Esteves in a corruption scandal in Brazil last November.

BTG Pactual will transfer up to $1 billion in Engelhart stock to its shareholders, reducing its stake in the unit to around 35 percent from 92 percent, it said in the filing. It expects to complete the transaction, first announced in April, in the third quarter.

BTG Pactual Commodities, as the unit had been called, was backed by $1 billion in proprietary capital from the bank and had about 700 employees at the end of last year. Sources told Reuters that the unit reported a gross margin of around $650 million in the first 11 months of 2015. (Reporting by Guillermo Parra-Bernal and Silvio Cascione; Editing by Lisa Von Ahn)