Brazilian sugar and ethanol company Biosev SA on Monday raised as much as 814.4 million reais ($407 million) in an unusual initial public offering — one offering a money-back guarantee to allay investor cocernss about the country’s equity markets.
Biosev, a unit of French commodities giant Louis Dreyfus Corp, sold as many as 46.67 million common shares at a price of 15 reais apiece, securities regulator CVM said on its website. An additional lot equivalent to 7 million shares was also sold.
This is the second time Louis Dreyfus and Biosev have taken a stab at an IPO. São Paulo-based Biosev originally announced plans for a share offering last June but suspended those plans in August, citing a lack of demand from investors.
As part of the transaction, Louis Dreyfus offered put options allowing investors to return the shares in July 2014 for the offering price of 15 reais plus interest. The price of such options, which was going to be disclosed in the pricing of the IPO, was not immediately available.
According to the CVM’s website, the company raised 9.35 million reais from the sale of the money-back guarantee, which is known in Brazil as warrants.
The money-back guarantee, which was devised by bankers helping Louis Dreyfus list Biosev, had never been seen in Brazil. None of the 242 share offerings that Thomson Reuters has on record since 2004 have been structured in such a manner.