Banco Agibank SA set the price range for its planned initial public offering at between 13.87 and 16.96 Brazilian reais per share as the company looks to become the second Brazilian digital bank to go public in 2018.
The IPO will consist of a primary offering of 89,272,291 new preferred shares and a secondary offering of 73,040,966 new preferred shares, according to a prospectus filing.
The offering would raise about 2.50 billion reais if the shares are priced at 15.41 reais apiece, the midpoint of the indicative range. This, according to Reuters, would value Banco Agibank at roughly 10 billion reais, or 6x book value, including proceeds from the offering. The newswire noted that the four biggest banks in Brazil trade at multiples of between 0.9x and 2x book value.
The prospectus filing listed Marciano Testa, the company's president, among the selling shareholders. Agibank plans to offer the shares on Brazil's primary stock exchange, though international placement agents will sell shares to qualified investors in the U.S. as well.
The bank plans to use proceeds from the IPO, which is set to price on June 21, to make investments in technology, acquisitions and marketing.
Banco Agibank's loan portfolio held 1.2 billion reais in March while its return on equity was 53%. The bank currently has 530,000 clients.
The bank also disclosed that federal prosecutors filed a civil lawsuit against the company in May alleging that it charged unreasonably high interest rates. The bank said its interest rates take client risk into account and are in line with competitors.
Banco de Investimentos Credit Suisse (Brasil) SA will act as lead manager for the offering, while Bank of America Merrill Lynch Banco Múltiplo SA, Banco Itaú BBA SA, Banco BTG Pactual SA and Banco Bradesco BBI SA will serve as offering coordinators.
Banco Agibank's upcoming IPO follows Banco Inter SA reportedly raising 721.9 million reais in its initial public offering in April.
As of June 4, US$1 was equivalent to 3.75 Brazilian reais.
