Cie Automotive Plans Brazil Share Sale in Early 2011 to Fund Acquisitions
Cie Automotive SA, a Spanish car- parts maker, said it will sell a stake of its Brazilian unit in an initial public offering during the “first part” of 2011 to finance new acquisitions in South America’s biggest economy.
Cie, which has more than 60 manufacturing plants throughout Europe, the Americas and Asia, is ready to sell shares of its Brazil’s Autometal SA unit to keep growing in the region, Chairman Antonio Pradera said in a phone interview.
“We have many possibilities of integrating companies in our project,” Pradera said, referring to Brazil. “It’s always been a project of growth. The growth potential in the Americas is spectacular.”
Cie is betting on rapid growth in emerging markets to offset a drop in demand in developed countries last year. This year there will be a “record” for sales, based on the company’s nine-month performance, Pradera said. Cie will double its 2009 sales before the target date of 2013, he said.
Cie rose 2 percent to close at 4.08 euros in Madrid trading. The stock has advanced 22 percent this year, valuing the company at 465 million euros ($615 million).
To further expand in emerging economies, the Bilbao, Spain- based company may buy businesses with sales of as much as 100 million reais ($58.6 million) in Brazil. Outside the Americas, the company is looking at Russia, Turkey, India and China to acquire smaller companies, Pradera said. More than 95 percent of sales are outside Spain, according to the executive, who said that demand in Europe won’t reach 2008 levels for at least three to four years.
Cie, whose clients include Volkswagen AG, General Motors Co., Ford Motor Co., Renault SA and other carmakers and auto- parts makers, said earnings before interest, tax, depreciation and amortization will also reach a “record” this year. This growth will reduce its debt-to-Ebitda ratio to close to 2.5 times at the end of the year and to about 2 times in 2011, from 4.6 times in 2009.
Founded in 1996, Cie may soon be able to pay a dividend again, after suspending it last year, Pradera said, without providing a timeframe.
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