100% of Braskem's freely traded shares can now be sold to the Shine I fund managed by IG4 Capital. The green light came on Monday (Sept. 21), when the CVM, Brazil's securities regulator, approved the registration of a tender offer for the petrochemical company. For anyone holding the shares through a broker, it means a choice once the offer is published: sell to the fund or stay on as a minority shareholder.
The offer, detailed in a statement by Braskem itself, covers all common and preferred shares in circulation that were not part of the shareholders' agreement signed with Petrobras, the state-controlled oil company that co-runs the petrochemical producer. B3, the São Paulo stock exchange, has already authorized the auction of the shares on its trading platform. The auction date and the participation rules will only be announced with the offer prospectus, which is still pending.
How it works: a tender offer, or OPA in the Portuguese acronym, works like an auction open to every shareholder of a company. Whoever makes the offer commits to buying shares from anyone who wants to sell, under the same rules for all. In Brazil, the CVM, the local equivalent of the U.S. SEC, must register the deal first, and the purchase happens in a single auction at the exchange.
How shareholders will be paid
Sellers will be paid with debentures, debt securities issued by NSP Investimentos, a non-financial holding company controlled by Novonor, the former Odebrecht group, according to Valor Econômico. Braskem said the offer will reproduce, share by share, the same consideration the fund handed to Novonor when it took control. In June, that consideration added up to roughly 547 million debentures of the first series and 273 million of the second, more than 820 million securities in total, almost four for every inhabitant of Brazil.
Those securities trace back to an old debt pile: IG4 took on about R$ 20 billion in obligations the former Odebrecht group had with large banks, Folha reports. That is the equivalent of nearly R$ 100 per Brazilian, counting all of the country's more than 200 million inhabitants. The same structure used in June will now be offered to the market.
Who controls Braskem
In June, Shine I became the controlling shareholder with 50.11% of voting capital against 47.03% held by Petrobras, replacing Novonor as the state company's partner, a gap of just over 3 percentage points. In total capital, which includes preferred shares, the state company is still larger: 36.15% to the fund's 34.32%. The offer is not available to investors living in the United States and does not include the ADSs, Braskem's share receipts traded in New York.