(Recasts with CEO comments and financial details throughout)
SAO PAULO, Sept 21 BR Properties SA is analyzing
whether to raise capital through a share offering, Chief
Executive Martin Jaco said on Wednesday, a sign that the
Brazilian commercial real estate company is preparing for
potential acquisitions in coming months.
São Paulo-based BR Properties sees a so-called
follow-on equity offering as a feasible way to raise funds, Jaco
told investors at an event. Chief Financial Officer André
Berenguer said, however, a potential debt offering could come
first if conditions allow, or asset sales could take place.
Management is mapping out targets across office and
industrial property, Jaco said, adding that about 4 billion
reais' ($1.3 billion) worth of potential acquisitions have been
identified. A capital hike would bolster BR Properties' balance
sheet ahead of any purchase, Jaco and other executives said.
The remarks underscore Jaco's efforts to focus on future
expansion after a year marked by a harsh recession, soaring
vacancies and declining rents and property prices. The company
counts on fundraising support from No. 1 shareholder GP
Investments Ltd, which won control of the property
company in recent months, to undertake any fundraising.
While activity on the office rental market remains tough,
there are signs of slower deterioration down the road, like
fewer vacancies and rent renegotiations, the executives said.
Shares of BR Properties gained 1.3 percent on Wednesday to
close at 8.57 reais, paring back losses to 3.5 percent in the
past 12 months.
Despite keeping cash and equivalents worth 1 billion reais,
analysts are concerned over BR Properties' ability to raise
debt. Net debt topped five times annual operational profit in
June, in theory preventing BR Properties from engaging in any
purchase in the short run, according to analyst Bruno Mendonça
of Santander Investment Securities.
GP Investments, the largest Latin American private-equity
firm and the owner of about 70 percent in BR Properties, has
expressed the intent to remain in control of the company and to
keep it listed on the São Paulo Stock Exchange, Jaco said.
Some analysts have attributed the performance of BR
Properties shares this year to the failure of GP Investments'
efforts to win full control of the company after a series of
GP Investments could even be ready to subscribe new equity
from BR Properties in a private placement, to help fuel growth,
($1 = 3.2094 Brazilian reais)
(Reporting by Ana Mano; Writing by Guillermo Parra-Bernal;
Editing by Steve Orlofsky and Matthew Lewis)