Banco Panamericano SA (BPNM4), the Brazilian lender that was purchased by BTG Pactual SA after a bailout last year, signed a non-binding agreement to acquire Brazilian Finance & Real Estate SA, the country’s biggest issuer of real estate-backed securities.
Panamericano seeks to buy Brazilian Finance & Real Estate, known as BFRE, excluding its asset management business, for 940.4 million reais ($502 million), according to a regulatory filing today. Under terms of the agreement, BTG Pactual would acquire BFRE’s asset management business for 275 million reais.
The memorandum of understanding is valid until Jan. 31, 2012.
“We see a lot of potential in the real estate financing business in Brazil and buying a specialist in this market will help us to jump a lot of steps in the growing process,” said Jose Luiz Acar Pedro, chairman of Panamericano in a phone interview from Sao Paulo.
“The bank didn’t operate yet in this market, but the activity is complementary to consumer and middle market finance,” he said. Panamericano will continue to invest in developing its real estate financing business and may make other acquisitions, he said.
BFRE is the biggest mortgage securitization company in Brazil and has issued more than 8 billion reais in real estate- backed securities known as certificados de recebiveis imobiliarios, or CRIs. It also offers financing for households and construction companies and has committed 800 million reais to construction loans, according to Fabio Nogueira, BFRE’s director and co-founder.
Panamericano will propose in Jan. 18 a shareholders’ meeting to increase its capital by 1.8 billion reais through the private placement of as many as 297.5 million new shares, according to the filing. The company would place 137 million preferred shares and 160.5 million voting shares.
BTG and Caixa Economica Federal plan to maintain their stakes in Panamericano, Acar Pedro said. BTG owns 37.6 percent of Panamericano shares and Caixa Economica Federal owns 36.6 percent.
The investment fund TPG-AXON Capital Management LP, which has 45 percent of BFRE’s non-voting shares, is interested in swapping its stake for shares in Panamericano, Acar Pedro said.
The partnership with Caixa, which has 70 percent of the Brazilian market for real estate financing, will be fundamental to strengthening BFRE, Nogueira said in a phone interview from Sao Paulo.
Mortgage and real estate lending has grown 40 percent this year and should continue to grow at this pace, Nogueira said. Brazil’s real estate financing represents only 5 percent of gross domestic product, compared with 15 percent of GDP in Mexico, he said.
Nogueira said Ourinvest Real State Part SA, which controls BFRE with 70.5 percent of its voting shares, will sell its entire stake. Nogueira and fellow co-founder Moise Politi plan to continue working under Panamericano management, he said.
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