Brasil Travel Cancels Initial Share Sale as Dozens of Others Wait to Offer

Brasil Travel Turismo e Participacoes SA canceled an initial public offering, citing “unfavorable” market conditions, as the operator of the country’s stock exchange says dozens of other companies are waiting for sentiment to improve to go public.

Brasil Travel had previously postponed the sale by a day after saying that potential investors were demanding the company’s owners adopt rules that would require them to retain shares equal to 50 percent of the amount they’re selling for at least six months, compared with 15 percent previously.

Brazil, Latin America’s largest economy, hasn’t had an IPO since July even as the benchmark Bovespa stock index rallied 28 percent over the past six months. About 40 Brazilian companies are waiting for markets to strengthen before going public in offerings totaling as much as $28 billion, Eduardo Refinetti Guardia, BM&FBovespa SA’s chief financial officer, said in an interview Feb. 7.

Potential investors in Brasil Travel’s IPO wanted current shareholders to show more commitment to the company, said a person with direct knowledge of the offering who asked not to be identified because he isn’t authorized to speak about the matter. Brasil Travel, a group of 35 travel agencies in Brazil, had planned to use funds raised in the offering to expand through acquisitions.

The company expected to benefit from an anticipated boom in Brazil’s tourism industry as the nation renovates roads and airports to host the 2014 Soccer World Cup and 2016 Summer Olympics.

A prospectus filed last month put the IPO price range at 1,250 reais to 1,650 reais per share. Brasil Travel said it planned to offer as many as 859,100 common shares, with 568,700 sold by existing investors.

Credit Suisse Group AG was coordinating the sale with Barclays Capital, Banco Santander SA and Flow Corretora de Mercadorias.

Rival travel agency CVC Brasil Operadora e Agencia de Viagens SA filed to sell shares with the securities regulator in August, without setting a time frame.

To contact the reporters on this story: Fabiola Moura in Sao Paulo at fdemoura@bloomberg.net; Cristiane Lucchesi in Sao Paulo at clucchesi5@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

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