7 de diciembre de 2015 / 20:34 / en 2 años

UPDATE 1-BTG Pactual-backed BR Pharma to move ahead with capital plan

(Adds details, updates share prices)

By Tatiana Bautzer and Paula Arend Laier

SAO PAULO, Dec 7 (Reuters) - Brasil Pharma SA, the Brazilian drugstore chain backed by embattled investment bank Grupo BTG Pactual SA, is going ahead with a plan to raise as much as 600 million reais ($160 million) from investors, the company told Reuters on Monday.

In a statement, BR Pharma, as the company is commonly known, said it “is sticking to the planned offering and is currently working on it,” declining to elaborate.

The capital plan, which set a floor of 400 million reais, could be launched formally as early as this week, when executives at São Paulo-based BR Pharma will meet investors in so-called road show meetings, according to a source who requested anonymity because the plan remains private.

Shares in BR Pharma plummeted almost 25 percent on Monday, the stock’s largest drop ever, on speculation the offering might face headwinds. BTG Pactual, which owns 37 percent of BR Pharma, declined to comment.

BR Pharma said in a statement to Reuters that BTG Pactual has had mixed results on a two-year turnaround of the drugstore chain.

On Nov. 12, the company sold money-losing unit Mais Econômica for 44 million reais, which sources close to the company said will help stem BR Pharma’s net loss.

The company posted a net shortfall of 420 million reais in the first nine months of the year.

Andrea di Sarno, a BTG Pactual partner, will probably be present at the road-show meetings and may take questions about the current state of the bank, the source said.

Shares of BTG Pactual have fallen 42 percent since Nov. 25, when André Esteves, formerly the bank’s controlling shareholder and chief executive, was arrested for his alleged involvement in Brazil’s biggest corruption scandal.

BR Pharma’s capital plan will be made via a restricted-effort offering, in which a 0.40-real price floor for shares was set. BTG Pactual will participate in the plan by partially converting debt into shares, the source added.

It is yet unclear whether BTG Pactual, which is trying to stop client fund withdrawals in the wake of Esteves’ arrest, will pour money into the drugstore chain, Brazil’s third-biggest. BTG Pactual is selling a number of non-essential assets to protect cash and reduce the size of its balance sheet.

Restricted-effort offers differ from standard ones in that a firm does not have to request registration of the plan with regulators, only qualified investors can participate, and the deal cannot be marketed through road shows or the media.

$1 = 3.76902 Brazilian reais Reporting by Tatiana Bautzer and Paula Arend Laier; Editing by Guillermo Parra-Bernal, Tom Brown and Leslie Adler

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