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IRB Brasil Re to pursue initial public offering (IPO)

22nd May 2017 - Author: Steve Evans

Brazilian reinsurance firm IRB Brasil Resseguros S.A. (IRB Brasil Re) is resuming the process of going public having received approval from shareholders to register for an initial public offering (IPO).

Brazil mapThe reinsurer is backed by the Brazilian government, which owns 27% of IRB Brasil Re, and a number of major financial firms in the country, having been formed in 1939 with the intention of providing reinsurance to local insurers, subsequently becoming the largest domestic reinsurance firm in Brazil.

IRB Brasil Re had a monopoly on local reinsurance until the Brazilian market was opened up in 2007 and foreign companies gained more access to the market.

Now, the shareholders of IRB Brasil Re, which include Itaú Unibanco Holding S.A. units Itaú Seguros S.A. and Itaú Vida e Previdência S.A., BB Seguridade Participações S.A. and Banco Bradesco S.A. have all filed on their intention to sell some of their shares in an initial public offering (IPO) of the reinsurer.

The original approval to IPO had been given in 2015 but the process delayed, partly due to the state of regional capital markets. Now the shareholders feel the timing may be better for an IPO and have approved the resumption of the process at an extraordinary general meeting of shareholders.

However, despite this approval the IPO filing will not be made with the Brazilian Securities and Exchange Commission until capital market conditions are deemed favourable. Hence the filings are deemed an announcement of the IPO, not an offering as yet.

The IRB Brasil Re shareholders also ratified the decision to list the reinsurers shares on the Sao Paulo stock exchange.

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