More Latin American ADRs are on their way to help break the ice that still clogs the pipeline of US capital to the region. Telefonica del Peru will unveil its ADR in June, when the government sells its remaining 29 per cent stake in the company for some $1.4 bn.
JP Morgan and Merrill Lynch will manage the international sale, while Banco de Credito hopes to sell $250-$400 mn worth of Telefonica shares on the domestic market.
‘Telefonica is a huge transaction by any standards,’ says Matthew Hickman, Latin American telecoms analyst at Lehman Brothers. ‘But by Peruvian standards, it is a flagship issue – the Telmex of Peru. It will be the first major flotation of a Peruvian blue chip outside the Lima Stock Exchange.’
Hickman believes that international demand will drive the deal and that the outlook for the region is good. ‘Markets have stabilised and the first month of 1996 was a strong start to the year,’ he says. ‘Latin America is showing good signs in both macroeconomic and market terms, and the conditions are right for issuers to think about coming to market.’
