(Reuters) – Brazil’s Investimentos e Participações em Infra-Estrutura SA will delay its initial public offering until the second quarter, a source with direct knowledge of the matter said, suggesting that investor concerns over recent turmoil in emerging markets may have eased by then.
Invepar, controlled by one investment fund, two state-controlled pension funds and construction giant OAS SA , wants to raise about 2 billion reais ($833 million) with the IPO, said the source, who declined to be identified because the plan is in the works.
The offering “could happen in May or June, when a window of opportunity opens and market conditions become a little more constructive,” the source said.
The delay in Invepar’s IPO comes as companies in Brazil face fundraising challenge this year. Rising borrowing costs, weak growth, a presidential election, and the withdrawal of monetary stimulus in the United States have left investors skittish.
In addition, tighter global liquidity is making Brazilian IPOs less attractive for foreign investors who have traditionally bought two-thirds of new issues for years.
Since the start of 2013, Brazil’s Bovespa stock index has shed 23 percent, while investors have pulled about $12.6 billion from domestic financial markets in the same period.
Pension funds Petros and Funcef, an investment fund run by state-run Banco do Brasil SA, and OAS wanted Invepar to price its IPO by February, sources said last year.
Invepar has mulled the deal for two years, the source said.
“Invepar is considering, among many alternatives for fundraising, an IPO,” the company said in a statement to Reuters. “Should Invepar opt for that alternative, markets will be promptly informed.”
Investors such as Fator Administradora de Recursos’ Fabio Moser said an Invepar IPO would offer exposure to Brazil’s fast-growing infrastructure sector.
Creating an attractive environment for infrastructure may bolster Brazil’s economy, which has struggled in the past three years. The country has the lowest investment ratio among Latin America’s top economies despite getting the region’s biggest chunk of direct investments and capital inflows.
Invepar operates toll roads in Brazil and Peru, a subway line in Rio de Janeiro and São Paulo’s international airport – Brazil’s busiest.
The company hired the investment-banking units of Banco do Brasil, Bank of America Corp, Itaú Unibanco Holding SA , Grupo BTG Pactual SA , Banco Bradesco SA, Citigroup Inc and HSBC Holdings Plc to handle the deal, the source said.