Klabin SA, Brazil’s biggest papermaker by market value, slumped the most in five years after the company approved a plan to sell 1.7 billion reais ($794 million) in securities to help finance a new plant.
The shares plunged 9.7 percent to 11.24 reais at 10:58 a.m. in Sao Paulo, the steepest intraday drop since October 2008. Trading volume was 1.7 times the three-month daily average, according to data compiled by Bloomberg. It was the worst performance on the Ibovespa (IBOV) stock benchmark, which rose 0.4 percent.
Klabin’s board authorized management to raise 1.7 billion reais, mainly through a public offering of units, the company said in a regulatory filing yesterday after the market closed. Each unit equals one voting share and four preferred shares, according to the filing. The sale will help finance investments of 5.3 billion reais in a new pulp plant.
The Sao Paulo-based company’s shares have lost 12 percent this year while the Ibovespa slumped 18 percent.
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