Brazil's top cement maker plans $5.4bn IPO

Brazil's top cement producer plans to raise up to $5.4 billion in an initial public offering there and in the United States, official documents filed with US market regulators this week show. Sao Paulo-based Votorantim Cimentos filed documents Wednesday for what would be the biggest IPO this year with the US Securities and Exchange Commission, a government agency tasked with regulating the US markets and securities. The proceeds are set to be used to "further expand our operations internationally through a vertically integrated platform and footprint in high-growth markets." The shares are to be listed on Sao Paulo's Bovespa bourse and in American Depositary Receipt -- one common share and two preferred shares -- on the New York stock exchange. "Morgan Stanley, J.P. Morgan Securities, Itau BBA USA Securities, Credit Suisse and BTG Pactual US Capital LLC will act as international underwriters with respect of the offering of the ADS (dollar-denominated American Depository Shares) and as agents, on behalf of the Brazilian underwriters, with respect to the offering of units outside of Brazil," the documents noted. A Votorantim spokesman said he could not comment, citing a "silent period" in effect until the start of the IPO. "Votorantim Cimentos will follow the procedures and legal deadlines to give continuity to the opening of its capital and, jointly with Votorantim Industrial, will be subject to restrictions imposed by regulatory bodies and will respect the silent period regarding the offering until its conclusion," a company statement said. The company described itself as "a global vertically-integrated heavy building materials company, with operations in North and South America, Europe, Africa and Asia." "We are the eighth-largest global cement producer in terms of annual installed cement production capacity, with 52.2 million tons as of December 31, 2012," it added in its filing to the SEC. The economic daily Valor meanwhile Friday quoted market sources as saying Votorantim might use the IPO proceeds to buy Spain's Cementos Balboa, which is part of Alfonso Gallardo group. Press reports said the IPO was likely to happen in the second half of the year. Votorantim Cimentos has nearly 36 percent of the Brazilian market, which last year consumed around 64 million tons of cement, according to the National Union of Cement Industry. Valor said the company, controlled by the Ermirio de Moraes family, last year invested $1.1 billion to boost its production, adding nearly three million tonnes to its capacity. This year, Votorantim is reportedly banking on a seven percent increase in demand in the Brazilian cement market.