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RPT-UPDATE 1-Brazil's Nexa Resources prices IPO at $16/share -sources
October 27, 2017 / 1:12 AM / a month ago

RPT-UPDATE 1-Brazil's Nexa Resources prices IPO at $16/share -sources

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By John Tilak and Stephen Lacey

TORONTO/NEW YORK, Oct 26 (Reuters) - Brazilian mining company Nexa Resources SA, formerly Votorantim Metais Holding SA, has priced its initial public offering at $16 per share, two people familiar with the situation told Reuters and IFR.

The company is offering 31 million shares and now expects to raise about $496 million, the people said, declining to be named as the matter is not yet public. Nexa said earlier this month that it expected to price at $18 to $21 per share, and raise up to $651 million in the Friday.

Nexa, a unit of Brazilian diversified industrial group Votorantim SA, declined comment.

The company is planning a dual listing in New York and Toronto under the ticker symbol “NEXA”.

Nexa expects to use some of the IPO proceeds to develop its growth projects in 2018 and 2019, including the Aripuana greenfield project in Brazil, according to a filing with regulators.

The issue would be Canada’s third biggest-ever mining initial public offering, according to Thomson Reuters data. It comes at a time of the year when IPOs in Canada have been slowing after the strongest first half in 11 years.

While Canada is the source of a large amount of the world’s mining financings, investors have been cautious about new issues in the space.

A selloff in commodity prices about four years ago sharply reduced the appetite for resource investments among portfolio managers. Investors will be closely watching Nexa’s debut to gauge interest in the mining sector.

“Any metals and mining IPO would be tough to do,” one industry source said earlier this week. “There is a lot of scar tissue among dedicated metals and mining investors.”

Reuters first reported in April that an IPO was being considered by Votorantim Metais and in July that the company was looking to raise $750 million.

Nexa operates five industrial compounds in Brazil’s state of Minas Gerais and in Cajamarquilla, Peru. It holds a majority stake in Cia Minera Milpo SSA.

The company produces a range of metals, including zinc, copper, lead, silver and gold. It is one of the world’s biggest zinc producers.

Underwriters for the offering include JPMorgan Chase , BMO Nesbitt Burns Inc, Morgan Stanley and Credit Suisse. (Reporting by Stephen Lacey for IFR in New York, John Tilak and Susan Taylor in Toronto, Nicole Mordant in Vancouver, Tatiana Bautzer in Sao Paulo; Editing by Andrew Hay)

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