Brazilian Cement Maker Votorantim Seeks $3.7 Billion in IPO

Votorantim Cimentos SA, Brazil’s biggest cement producer, said it will raise as much as $3.7 billion in an initial public offering, less than the $5.4 billion target the company originally announced.

The cement producer and its parent plan to offer 400 million units for listing in Sao Paulo or their equivalent in American depositary receipts in New York, according to a regulatory filing. The units will be offered for 16 to 19 reais ($7.68 to $9.12) each, while the ADRs, equivalent to two shares, will be offered for $15.59 to $18.51, the filing showed. Votorantim first announced its offering plans last month, using a $5.4 billion placeholder amount, filings show.

Sao Paulo-based Votorantim Cimentos, the world’s eighth-largest cement maker, with factories from Latin America and the U.S. to Turkey, India and China, plans to use proceeds from the sale for expansion outside its home country and potential acquisitions. The company seeks to follow other Brazil-based companies such as Banco do Brasil SA’s insurance unit and Alupar Investimento SA in completing IPOs this year.

Votorantim Cimentos, founded in 1933, is moving ahead with the sale even after the benchmark Brazilian Ibovespa declined 9.6 percent this year amid slowing growth and as government intervention in utilities, energy and banking crimped earnings.

Of the 400 million units on offer, Votorantim Cimentos plans to sell 285.7 million, while Votorantim Industrial SA will sell the remaining 114.3 million, according to the filing. Each Votorantim Cimentos unit is equal to one common share and two preferred shares, according to the filing.

Votorantim Cimentos is controlled by Votorantim Participacoes SA, owned by the Ermirio de Moraes family, according to the filing. Antonio Ermirio de Moraes, the patriarch, has personal wealth estimated at $6.8 billion, according to the Bloomberg Billionaires Index.

The ADRs will be listed on the New York Stock Exchange under the symbol VEBM, and the common stock on the Sao Paulo Stock Exchange under VEBM3, the company said in its filing. Morgan Stanley, JPMorgan Chase & Co., Banco Itau BBA SA, Credit Suisse Group AG and BTG Pactual SA are managing the sale.

Before it's here, it's on the Bloomberg Terminal.