Invepar Plans IPO to Boost Brazil Infrastructure Investment

Brazilian infrastructure holding company Investimentos e Participacoes em Infra-Estrutura SA, known as Invepar, is planning an initial public offering of at least 1.5 billion reais ($949 million) to expand investments in the country’s booming infrastructure sector.

Previ, the pension fund of Banco do Brasil SA (BBAS3) employees and the largest shareholder in Invepar, aims to increase the company’s capital to invest in airports, highways, subways and a bullet train linking Rio de Janeiro and Sao Paulo, said Marco Geovanne da Silva, Previ’s shareholdings director.

“There are many opportunities for infrastructure investments in Brazil today but our blanket is short,” Silva told journalists at a conference in Rio de Janeiro today. “We need to boost the investment capacity at Invepar with capital from shareholders or the entrance of new investors.”

The IPO would be Brazil’s first by an infrastructure company, and should happen by October 2012, Silva said.

The government of President Dilma Rousseff is boosting infrastructure spending as it prepares to host the 2014 World Cup and the 2016 Olympic Games, develops new oil and gas fields and builds hydroelectric dams.

Expenditures to improve airports, ports, highways and the power grid are set to rise to 160 billion reais by 2012 from 121 billion reais in 2009, according to the Sao Paulo-based Association of Infrastructure and Industries.

World Cup

The government forecasts the 12 cities hosting World Cup games will need investments of 23.8 billion reais, according to a January report. Airports will require an additional 5.6 billion reais.

Previ, which values Invepar at 4 billion reais, owns 40 percent of the company. Contractor OAS Engenharia e Participacoes Ltda, Funcef, the pension fund for workers at state-controlled bank Caixa Economica Federal, and Fundacao Petrobras de Seguridade Social, pension fund for Petroleo Brasileiro SA staff, each hold 20 percent stakes, Silva said.

Invepar has stakes in companies that operate two lines of the Rio de Janeiro subway; a major highway connecting the north and central zones of Rio de Janeiro to the residential western side of the city; and highways in the states of Sao Paulo, Bahia and Rio de Janeiro.

To contact the reporter on this story: Adriana Brasileiro in Rio de Janeiro at abrasileiro@bloomberg.net

To contact the editor responsible for this story: Francisco Marcelino at mdeoliveira@bloomberg.net

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