May 29, 2017 / 4:06 PM / a year ago

UPDATE 1-Brazil's Intermédica files for regulatory clearance to launch IPO

(Adds details in 2nd paragraph, context)

By Bruno Federowski and Paula Laier

SAO PAULO, May 29 (Reuters) - Brazilian healthcare services provider Notre Dame Intermédica Sistema de Saúde SA on Monday filed for regulatory clearance to launch an initial public offering, the latest in a wave of stock listings in Latin America’s largest economy after a years-long drought.

The investment banking unit of Itaú Unibanco Holding SA will act as lead underwriter, according to documents filed with securities regulator CVM. The request accounted only for the sale of common shares in the hands of existing shareholders, with no mention of new issues.

For years, Brazilian companies looking to tap local equity markets bumped into tepid demand as a deep recession corroded corporate profits and sky-high interest rates dampened the allure of risky investments.

A financial market rally in 2016 helped to kick-start IPO activity this year as investors cheered President Michel Temer’s efforts to balance the budget and implement structural reforms.

Still, a growing political scandal threatening his administration has fueled volatility in recent weeks, potentially driving some firms to think twice before going back to local markets, analysts said.

Reuters had reported in February Intermédica had hired banks to manage an IPO, with controlling shareholder Bain Capital LP looking to cash in on growing investor appetite for shares of Brazilian healthcare and personal services firms. (Reporting by Bruno Federowski and Paula Laier; Writing by Bruno Federowski; Editing by Nick Zieminski)

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