Banrisul Cartões SA, the card payment unit of Banco do Estado do Rio Grande do Sul SA, has filed for an initial public offering of its preferred shares and for the listing of the shares under the Brazilian stock exchange's "level 1" corporate governance segment, the bank said.
The offering will consist of the issuance of new preferred shares by Banrisul Cartões as a capital increase, as well as the sale of the company's preferred shares held by the Brazilian state of Rio Grande do Sul, which is the bank's controlling shareholder, in a secondary offering.
The shares sold in the secondary offering will serve as payment to the state in lieu of a capital reduction of Banco do Estado that was approved by shareholders in April.
To prepare for the offering, Banco do Estado earlier decreased its share capital by 353.3 million Brazilian reais, refunding shareholders with 1 preferred share in Banrisul Cartões in exchange for 2 shares in the bank. The operation will create 204,487,238 preferred shares in Banrisul Cartões, according to a previous filing, representing 50% of the unit's share capital.
The offering will take place in Brazil, although the shares will also be subject to placement efforts abroad for U.S.-based qualified institutional buyers and for certain investors in other countries.
Banco do Estado also expressed its intention to carry out a private subscription of common and preferred shares to be issued by Banrisul Cartões prior to the IPO's registration. The common shares will be issued in order to adjust Banrisul Cartões' shareholding structure prior to the issuance of preferred shares, while the preferred share issuance will "make it possible to lend shares to be used in stabilization procedures," the bank said.
Banco do Estado will not hold preferred shares issued by Banrisul Cartões after the offering, while the state of Rio Grande do Sul will sell all of its preferred shares in Banrisul Cartões.
Banco do Estado will serve as lead coordinator for the offering and BTG Pactual Bank as joint coordinator.
As of May 25, US$1 was equivalent to 3.66 Brazilian reais.
