| Deals of the year: Tech and telecoms illustrate the ups and downs of 2000 Author: Felix Salmon Issuer: PetrobrásDeal: equity offeringAmount: $4.3 billionSole bookrunning manager: Merrill LynchCo-lead manager: ABN Amro RothschildSole lead manager of Brazilian tranche: CSFB Garantia On August 9, Brazil raised $4.3 billion from the sale of a 16.64% stake in state oil company Petrobrás. Not only was it the largest-ever equity offering from Latin America, it was also over twice the size of all the equity and equity-linked issues from Latin America in 1999. Although a secondary issue, the deal was a major privatization. For one thing, it involved issuance of new American depositary shares on the New York Stock Exchange, complete with the company’s first US GAAP financial statements and SEC filings. For another, the sale of shares to some 337,314 members of the Brazilian general public, following the first-ever mass advertising campaign for a Brazilian security offering, doubled the number of shareholders in the country. In the end, some 40% of the deal, $1.4 billion, was distributed in Brazil, compared with initial forecasts of 20% domestic demand. Even putting to one side the retail part of the domestic offering, notes Andrew Shores, head of CSFB’s equity operations in Brazil, the Petrobrás deal was “the largest emerging markets block sold to domestic institutional investors anywhere in the world.” |