Telecommunication-Tower Operator T4U Plans IPO in Brazil

By Rogerio Jelmayer

SAO PAULO--Brazilian telecommunication-tower operator T4U Holding Brasil SA is planning an initial public offering, which could be the country's first IPO this year, facing a challenging environment in the equity markets.

The company, which is controlled by Israel-based Fishman Group, didn't disclose the number of shares to be sold nor the exact timetable to hold the IPO.

It hired Bank of America Merrill Lynch, Itau BBA, UBS and Citibank to coordinate the sale of shares.

In the first half of this year, the company posted net revenue of 36 million Brazilian reais ($15.78 million) and a net profit of BRL19 million, according to the preliminary prospectus of the operation. Its main clients in Brazil are the largest mobile-phone companies in the country.

The shares will be sold via a primary and a secondary offer. The undisclosed amount to be raised from the primary offer will be used for investment in company operations and also in potential acquisitions, it said in the prospectus.

The IPO plans come amid an increased interest in telecommunication-tower companies in Brazil, such as American Tower Corp., which earlier this year acquired mobile-phone infrastructure company BR Towers SA. Meanwhile, mobile-phone companies have divested themselves of towers to focus on investments in their core business.

Brazil has 275 million mobile-phones under use, more than the country's nearly 200 million population, and the main companies operating here are the Telefonica Brasil SA (VIV, VIVT4.BR), the local unit of Spain's Telfonica SA (TEF, TEF.MC); TIM Participacoes (TSU, TIMP3.BR), the local unit of Telecom Italia SpA (TI, TIA, TIT.MI); Claro, the local unit of Mexico's America Movil SAB (AMOV, AMX, AMX.MX); and Oi SA (OIBR, OIBR4.BR).

T4U's IPO plans came amid a challenging environment for companies in Brazil.

After two years of relatively lackluster performance, share-offer activity totaled BRL23.89 billion last year, up from BRL14.3 billion in 2012, according to the Association of Financial and Capital Market Institutions, or Anbima.

The share-offer volume last year was fueled by a significant offer in April of BRL11.5 billion from Brazilian pension-and-insurance company BB Seguridade Participacoes SA (BBSE3.BR), which was the world's largest IPO in 2013.

Since then, some companies have pulled IPO plans because of adverse market conditions, including airline Azul Linhas Aereas and cement producer Votorantim Cimentos SA. So far this year, Brazilian companies haven't put forward an IPO, the first such year since 2004.

Write to Rogerio Jelmayer at [e-mail]

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