Morales & Besa advised Cencosud Shopping S.A. in the largest IPO in the history of the local market
Morales & Besa successfully advised Cencosud Shopping S.A. in its registration in Chile as an issuer of publicly traded securities, and in the structuring, issuance, offering and placement of 472,000,000 newly issued shares of common stock (“Shares”).
The offering consisted of (1) a public offering of 409,224,012 Shares in Chile carried out by local broker dealers Banchile, LarrainVial, JP Morgan Corredores and BCI Corredores; and (2) a concurrent international offering of 62,775,988. Shares carried out by placement agents BofA Merrill Lynch and J.P. Morgan in the United States to qualified institutional buyers as defined in Rule 144A under the Securities Act of 1933 and in other countries outside of Chile and the United States to certain non-U.S. persons in reliance on Regulation S.
The placement of the Shares was carried out through a book building process and award of the book called “Subasta de Libro de Órdenes” in the Santiago Stock Exchange, following the pricing and allocation of the Shares determined by the Company on the advice of its placement agents and financial advisors.
The initial public offering of the Company is the largest in the history of the local market, raising a total amount of $717,912,000,000 (USD 1,054,000,000 approximately).
This was a unique and complex transaction, as it involved carrying out along several processes in parallel, namely:
- Registration of the Company, its securities and prospectus for the local offering with the CMF, the local securities regulator and supervisor.
- Corporate restructuring of Cencosud S.A., the Company’s parent, to spinoff and incorporate the Peruvian and Colombian shopping centers and real estate assets into the Company.
- Issuance, registration and placement of both a 10-year bond line and a 30-year bond line for up to UF12,000,000 each (i.e., in total, approximately USD 960MM), and the issuance and placement of Series A Bonds under the 10-year indenture in an amount UF7,000,000 (approximately USD 280MM) and the issuance and placement of Series B Bonds under the 30-year line of bonds in an amount of UF 3,000,000 (approximately USD 120MM).
- The IPO and listing of the Company as above described.
About Cencosud Shopping S.A.: The company is a regional operator of shopping centers in Latin America with operations in Chile, Peru and Colombia. On a pro form basis, as of March 31, 2019, it is the second largest owner of real estate assets in South America. It owns and operates 33 shopping centers (including two office towers in the Costanera Center, the biggest shopping center in Chile) in Chile, four assets in Peru (consisting of two shopping centers, a plot of real estate with a supermarket where a shopping center is currently under construction, and a plot of real estate) which are located in Lima and Arequipa, and four shopping centers located in each of Medellín, Bogotá, Barranquilla and Cali, Colombia’s four most populous cities.
The Morales & Besa’s team that participated in this operation was led by partner Guillermo Morales along with senior associate, Andrea Díaz, and associate, Mariana Schnettler.