March 14, 2019 / 2:51 PM / 7 months ago

Brazil's Caixa to split new Banco Pan shares with BTG Pactual

SAO PAULO (Reuters) - A unit of Brazilian state lender Caixa Econômica Federal will exercise its option to buy half the shares offered in Banco Pan SA’s capital increase of 400 million reais ($105 million) in 2017, according to a Thursday securities filing.

Caixa Participações, or Caixapar, as the unit is known, and investment bank Banco BTG Pactual SA will each hold a 41.7 percent stake in Banco Pan after the deal, which was announced in 2017 as the mid-sized lender suffered heavy losses.

Caixa originally sat out the transaction due to scarce capital, letting BTG Pactual buy all the new shares if it granted an option for Caixa to eventually buy half of them.

The filing on Thursday confirmed that Caixa will exercise the option, avoiding dilution of its stake after improvement of its own balance sheet and a turnaround at Banco Pan. Caixa was already a shareholder in the bank.

Shares of Banco Pan have soared 78 percent this year, closing at 3.40 reais on Wednesday, as the lender turned the corner after years of losses. Banco Pan set the share price for its capital increase at 1.88 reais, according to the 2017 filing.

The capital injection at Banco Pan was aimed at boosting its loan book and complying with capital requirements.

Banco Pan’s shares rose 2.4 percent on Thursday, their fifth straight day of gains.

Reporting by Carolina Mandl and Ana Mano; Editing by Jeffrey Benkoe

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