Carrefour’s Brazilian IPO May Raise as Much as $1.7 Billion

Carrefour SA’s Brazilian unit has filed for an initial public offering that may raise as much as 5.6 billion reais ($1.7 billion), inching closer to a long-planned transaction despite a recent decline in the country’s stock market.

Carrefour and Peninsula, an investment company controlled by billionaire Abilio Diniz, plan to sell as many as 297 million shares in Atacadao SA for 15 reais to 19 reais each, the Boulogne-Billancourt, France-based retailer said in a statement late Wednesday. Carrefour has planned the IPO for more than three years.

At the top price, the IPO of Atacadao would be Brazil’s biggest since 2013. The benchmark Ibovespa Index has dropped 10 percent from its closing high this year on Feb. 21. It has fallen on concern about corruption allegations against President Michel Temer, who has denied the charges. Still, the index is up 65 percent from a low in January 2016.

Brazil, Latin America’s largest economy, has become a key factor in propping up Carrefour’s earnings in recent years amid disappointing growth in France. The grocer’s quarterly same-store revenue in Brazil has climbed between 5.6 percent and 13 percent since the third quarter of 2013, a stellar showing in a nation muddling through a two-year recession that’s the worst on record. Atacadao’s adjusted earnings rose 43 percent to 3.38 billion reais in 2016, Carrefour has said.

Carrefour expects the IPO to be priced on July 18, with trading beginning on the Sao Paulo stock exchange on July 20.

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