Brookfield Rises in Brazil as Controller Considers Delisting

Brookfield Incorporacoes SA, Brazil’s worst-performing homebuilder in the past year, led gains in the country’s benchmark gauge after its controlling investor said it may buy back the outstanding shares and delist the stock.

The shares gained 4 percent to 1.29 reais at the close of trading in Sao Paulo, after earlier climbing 15 percent. It was the best performer on the Ibovespa, which fell 0.2 percent.

BRB Participacoes, the homebuilder’s controlling shareholder, is “analyzing strategic alternatives” including delisting the stock, Brookfield said in a regulatory filing today. BRB is also considering a capital increase through a new equity sale and expects to make a decision within 120 days, according to the filing.

Brookfield has lost 63 percent in the past 12 months, the worst performance on the BM&FBovespa Real Estate Index. The company said on its third-quarter earnings release that it’s focused in returning to profitability after its fast growth brought “challenges” to operations. The Rio de Janeiro-based homebuilder reported net losses for the past four quarters.

“It’s more likely that they’ll delist, considering how much debt they have and the stock price,” Eduardo Silveira, an analyst at Espirito Santo’s investment banking unit, said in a phone interview from Sao Paulo. “Maybe as a private company it can deal better with the adjustments they’re going through.”

The stock jumped 19 percent on Jan. 23 after Brazilian website InfoMoney said the company may be delisted, without saying how it got the information.

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