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BTG Pactual to reorganize EFG International stake, sell 2B reais in shares

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BTG Pactual to reorganize EFG International stake, sell 2B reais in shares

Brazilian investment bank Banco BTG Pactual SA said it will transfer an approximate 25% stake in Switzerland-based EFG International AG to BTG Pactual Holding SA, in a corporate reorganization which will see the banking unit retain an approximate 5% stake, according to a filing.

The plan, subject to regulatory approval, is meant to give a "clearer perception" of BTG Pactual's business performance, the bank said May 28. In addition, the transaction will "substantially" increase the bank's capital ratios. BTG Pactual estimates the move will boost the banking unit's core tier 1 equity to 13.4% from 10.2%, as of March 31, 2019. Banco BTG Pactual and BTG Pactual Holding are both part of BTG Pactual Group.

Earlier in May, CFO João Dantas ruled out the sale of its EFG International stake, announcing that the company was opting for reorganization, which would seek to simplify the Brazilian investment bank's structure and enable investors to better gauge its stand-alone profitability.

In February 2016, the Brazilian investment banking giant signed an agreement with EFG International for the sale of BTG Pactual's Swiss unit BSI SA. That deal, worth about CHF1.33 billion, left BTG Pactual with about 20% stake in EFG at the time.

Shares for sale, new retail bank

In addition, BTG Pactual said it will sell about 2 billion reais in shares in the banking unit, held by BTG Pactual Holding, in a secondary public offering. The company said the offering was meant to increase its free float and boost the liquidity of its shares on the B3 stock exchange.

The company also announced that it will launch a specific business unit for digital initiatives in the retail sector, which will include retail banking services.

As of May 28, US$1 was equivalent to 4.02 Brazilian reais.