Brazilian prosecutors indict BTG’s Esteves, Sen. Delcidio do Amaral

Luciana Magalhaes – 12/8/2015

Brazilian prosecutors indicted the former chief executive officer of investment bank BTG Pactual, André Esteves, and Sen. Delcidio do Amaral on Monday on charges of interfering with a criminal investigation.

The two men were arrested two weeks ago as part of the investigation into corruption at state-controlled oil company Petróleo Brasileiro SA, or Petrobras.

Sen. Amaral’s lawyer declined to comment ahead of the charges and couldn’t be reached Monday evening. Mr. Esteves’s lawyer declined to comment before having seen the charges. Both Mr. Esteves and Sen. Amaral have denied wrongdoing in the past through their lawyers.

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Brazil’s BTG Pactual sells its Rede D’Or stake for $616 million

Rogerio Jelmayer and Luciana Magalhaes – Dow Jones Business News, 12/02/2015

Troubled Brazilian investment bank BTG Pactual SA on Wednesday said it sold its remaining 12% stake in the local hospital operator Rede D’Or São Luiz for 2.38 billion reais ($616 million) to Singapore’s sovereign- wealth fund GIC Pte. Ltd.

BTG and Rede D’Or’s controlling shareholder–the Moll family–sold a 16% stake in the hospital group to GIC in May.

The move comes as BTG is trying to raise cash following last Wednesday’s arrest of André Esteves, its controlling shareholder, as part of Brazil’s largest-ever corruption investigation. Mr. Esteves remains jailed in Rio de Janeiro.

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Brazil’s BTG loses investment grade, bonds slump after CEO arrest

Guillermo Parra-Bernal – Reuters, 12/02/2015

Moody’s Investors Service stripped Brazil’s troubled Banco BTG Pactual SA of its investment-grade rating on Tuesday as confidence in the investment bank’s future and its bonds slumped following the arrest of its founder André Esteves in a corruption probe.

Moody’s downgraded BTG two notches to BA2 from BAA3 because of the challenges the bank faces to maintain its liquidity in the wake of the arrest of its former chairman and CEO, the rating agency said.

Grupo BTG Pactual SA’s bonds slumped for a second day on concern about fallout from the arrest of Esteves, its largest shareholder, despite management efforts to shore up cash reserves at Latin America’s largest independent investment bank.

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Mikhail Fridman proposes $4 billion investment in Oi of Brazil

Dan Horch – The New York Times, 10/26/2015

The Russian oligarch Mikhail Fridman may spend as much as $4 billion to expand his telecommunication holdings into South America.

On Monday, the Brazilian telecommunications company Oi said that Mr. Fridman’s investment group, LetterOne, had given it a proposal to invest in a possible merger of Oi with Telecom Italia’s local operator, TIM Participações.

“In accordance with LetterOne’s proposal, sent by BTG Pactual to Oi’s management and board, LetterOne would be willing to invest as much as $4 billion in Oi, conditioned on the operation of consolidation (with TIM),” Oi said in a statement. The company said that it would “analyze” the offer.

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Brazil’s beleguered billionaire Batista takes another beating

Kenneth Rapoza – Forbes, 08/29/2013

Eike Batista is in a fight for his billion dollar life. If that fight was akin to a boxing match, he’d be up against the ropes taking a slugging.  A left hook. A right hook. The bell goes off just in time as Eike gets pulled away from his opponent. Or better yet, opponents. This man is taking a beating from every one: shareholders, venture partners, congress, you name it.

On Thursday, Brazilian news weekly Veja said that BTG Pactual, run by FORBES’ No. 329, Andre Esteves, was in talks with Batista to back out of an investment deal they have with Eike’s EBX Group.

EBX is Eike’s holding company of roughly six different firms — from beleaguered oil firm OGX Petroleo to mining company MMX, which has vultures currently circling it.

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BTG Pactual IPO raises $1.96-billion

Guillermo Parra-Bernal – Reuters/Globe and Mail, 04/24/2012

BTG Pactual and its shareholders raised 3.656 billion reais ($1.96-billion U.S.) in Brazil’s first initial public offering of an investment bank, in a show of confidence in the firm and its billionaire founder, André Esteves.

BTG Pactual and its shareholders sold a total 117 million units, a combination of common and preferred stock of its investment and private equity units, at a price of 31.25 reais each, according to information posted on the securities regulator CVM’s website on Tuesday. That was within the suggested price range of 28.75 reais and 33.75 reais

The amount sold fell short of the 121.5 million units that BTG Pactual and partners had on offer. The deal values the São Paulo-based bank at about 27 billion reais, making it Brazil’s 16th-biggest listed company by market capitalization.

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BTG Pactual gives investors five days to pull out of listing

Samantha Pearson – FT, 04/17/2012

BTG Pactual has given retail investors five days to pull out of its high-profile listing next week after it emerged that the chief executive of the Brazilian investment bank had been fined by Italian regulators for insider trading.

The initial public offering, which is expected to value the bank at up to $15bn and provide a much-needed boost to Brazil’s equity market, has been lauded as the latest conquest in the rise of Latin America’s largest independent investment bank.

However, the deal received a blow on Monday when it emerged that André Esteves, BTG Pactual’s chief executive, who owns 24 per cent of the bank, had been fined €350,000 by Consob, the Italian financial watchdog, for insider trading.

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Brazil IPO market poised for revival despite setbacks

Joan Magee – IFR Asia, 04/12/2012

Brazil has not seen an IPO in nine long months, but recent market momentum has revived the hopes of bankers and issuers for a resurgence of the once-mighty market. However, the exuberance may be a bit overdone. Cracks are already starting to show after Seabras was forced to postpone its primary offering Wednesday.

Notwithstanding broader market volatility, valuation disputes are threatening to sabotage deals amid, what some argue to be, inflated pricing expectations among Brazilian companies, often at the urgings of bankers seeking mandates.

“By and large, it seems issuers are more realistic [than before] and aren’t going for 2007-type valuations, but, as bankers in Brazil aren’t making any money, they go into pitches very aggressively and throw out these huge numbers to issuers because they need to get deals,” said a senior ECM banker in New York.

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Private equity chances in Brazil’s mid-market

Alvaro Goncalves – FT, 04/08/2012

Overtaking the UK as the world’s sixth-largest economy in 2011, Brazil has a surface area more than twice as big as Europe and a population over three times that of the UK. Since 1990, poverty levels have halved, with 40m people joining the middle class since 2003. Despite GDP contracting in the third quarter of 2011, the International Monetary Fund continues to make fluctuating predictions of a GDP growth between 3 and 5 per cent for the coming years.

In a market that continues to be this dynamic, it is easy to see why Brazil has warranted such attention from investors looking for returns in a turbulent financial crisis. And the private equity world has not been exempt from scrutiny. Brazilian private equity has enjoyed a significant renaissance since the late 2000s when international investment managers re-entered the market, attracted by the prospect of strong returns and a proven resilience to the global financial crisis of late 2008. The period saw such landmark events as Carlyle’s first Brazil office opening, Blackstone’s acquisition of Patria Investimentos, JPMorgan’s acquisition of Gavea Investimentos, the establishment of BTG Pactual and Vinci Partners, and the launch of a Brazilian team for TPG Capital.

Despite drawing short of the totals of the other emerging markets comparable to its size, private capital raised by Brazilian private equity funds leapt 500 per cent to over $3bn in 2010, driven predominantly by the greater participation from the mega funds. More than 90 per cent of the capital raised in 2010-11 poured in to only six funds in Brazil, with a few notable examples of billion-dollar-plus funds closing in 2011.

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BTG takes step towards listing

Joe Leahy & Patrick Jenkins – FT, 02/28/2012

BTG Pactual has mandated Goldman Sachs and JPMorgan to help manage its initial public offering as it tries to build one of the biggest independent emerging market investment banks.

The IPO, which is expected to value the Brazilian bank at $13bn to $14bn, follows its merger with Celfín Capital of Chile, which cemented its position as Latin America’s biggest homegrown securities group.

BTG will also manage the IPO, and is expected to file its prospectus with regulators as early as this week, according to people familiar with the matter.

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