27 de agosto de 2015 / 13:51 / hace 2 años

Brazil's Caixa may rework unit IPO on partnership, sources say

SAO PAULO, Aug 27 (Reuters) - Brazilian state-controlled lender Caixa Econômica Federal is inclined to offer fewer shares of its insurance unit in an initial public offering this year should the partnership that helped create the subsidiary be renewed ahead of the deal, two sources with knowledge of the plans said on Thursday.

Caixa Econômica and France’s CNP Assurances SA are in talks to renew a 20-year partnership in a vehicle that forms part of Caixa Seguridade Participações SA, the insurance unit that is being prepared for a listing, both sources said, requesting anonymity as the process is private.

Executives at Caixa told investment banks working on the IPO in a Wednesday conference call that renewing the venture with CNP ahead of the IPO would automatically reduce the lender’s need to sell a significant stake in the unit, the first source noted.

The partnership, which is set to expire in 2021, is “very likely” to be extended, a second source said.

Earlier this month, Reuters reported that Caixa Econômica was considering raising about 10 billion reais ($2.8 billion) from the sale of about 25 percent of Caixa Seguridade. If the venture is renewed, CNP may pay about the same amount to Caixa Econômica for the right to distribute the Caixa Seguros Holding SA venture’s products and services across the lender’s branches through 2035, the sources said.

Neither source gave an estimate of the size of the reworked offering.

CNP has a 51.75 percent stake in the Caixa Seguros Holding venture, with Caixa Econômica owning a 48.21 percent stake.

“Such payment would ease the bank’s necessity for cash at least for now,” the first source said.

According to a prospectus on the IPO that was published this week, Caixa Econômica filed to sell some of its stake in Caixa Seguridade through a so-called secondary offering - in which proceeds form the deal go to the shareholders, not the company’s coffers.

Brazil’s federal government, Caixa Econômica’s full owner, is pinning hopes on a successful Caixa Seguridade IPO to help narrow a swelling budget deficit.

Brasilia-based Caixa declined to comment, citing the quiet period related to the IPO. Efforts to contact CNP representatives in São Paulo for comment were unsuccessful.

State-controlled Banco do Brasil SA’s investment banking unit is the deal’s top underwriter, followed by UBS AG . Banco Bradesco BBI, Itaú BBA SA, Grupo BTG Pactual SA , Goldman Sachs Group Inc, Banco Brasil Plural, Citigroup Inc and Bank of America Merrill Lynch are also working on the offering.

$1 = 3.5638 Brazilian reais Reporting by Guillermo Parra-Bernal; Additional reporting by Aluísio Alves in São Paulo Editing by W Simon

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