(Bloomberg) -- Brazil's largest private railway operator raised about 6.4 billion reais ($1.1 billion) in a share offering after extending a flagship freight concession.
Rumo SA sold 294.3 million new voting shares at 21.75 reais apiece, according to a regulatory filing. The initial amount of 235 million shares was increased by 59.3 million through an additional allotment.
The price represented a discount of about 2.9% to Monday's closing level of 22.41 reais. Shares of Rumo rose as much as 6.1% in Sao Paulo Tuesday, the best-performing name on the benchmark Ibovespa index at 4:13 p.m. local time.
Controlled by energy and infrastructure conglomerate Cosan SA, Rumo owns railways that connect Brazil's agricultural heartland with the nation's largest ports. In May, it signed an extension of a concession for the Malha Paulista network until 2058, with an estimated 6.1 billion-real investment. Proceeds from the offering will go to renewal fees and associated projects.
Banks running the deal were Bradesco BBI, BTG Pactual, Itau BBA, BB Investimentos, JPMorgan, Safra, Citigroup, Credit Suisse, Goldman Sachs, Morgan Stanley and XP Investimentos.
In 2019, Rumo won a concession to operate a 955 mile stretch of the Norte-Sul railway, which will be the spine of a planned network connecting farming states like Mato Grosso with ports. It will spend about 2.7 billion reais to complete the line.
Cosan is considering listing other subsidiaries, including Raizen, as part of a corporate reorganization. Gas and energy unit Compass has filed a request for an initial public offering.
©2020 Bloomberg L.P.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
