Brazilian reinsurance firm IRB Brasil Resseguros S.A. (IRB Brasil Re) is reportedly preparing for a secondary share offering involving at least 9% of its capital, according to sources at Reuters.
State-run bank Caixa Economica Federal is expected to sell an 8.9% stake in IRB, worth around 2.4 billion reais (US $648.4 million), within the next few weeks, people familiar with the matter told the publication.
The share offering would follow on from IRB’s initial public offering (IPO) in 2017, which allowed the reinsurer’s existing shareholders to offload a portion of their stake in order to raise capital and bring new investors onboard as the firm looked to expand.
The IPO pricing put shares at 27.24 reais ($8.64) and raised just over 2 billion reais ($540 million), with around 73.5 million shares sold by IRB Brasil Re’s major holders.
Reuters speculated that other shareholders may also join the latest offering and increase its size, with state-controlled lender Banco do Brasil SA rumoured to be considering the sale of some shares.
The 8.9% stake offered by Caixa is owned by the Brazilian government fund responsible for financing student loans.
While the government owns a larger stake in IRB, it will be easier for Caixa to obtain approval for the sale of the 8.9% stake initially, sources explained.
Reuters also confirmed that Caixa Economica Federal, manager of the fund, Banco do Brasil, and the investment banking units of Banco Bradesco SA, Itaú Unibanco Holding SA and Bank of America Corp will manage the offering.
