Cie Automotive to sell a stake of its Brazilian unit in an initial public offering

Article by Christian Andrei, on December 5, 2010

Spanish car parts maker Cie Automotive SA says it will sell a stake of its Brazilian unit in an initial public offering during the “first part” of 2011 to finance new acquisitions in Brazil. With more than 60 manufacturing plants in the Americas, Europe, and Asia, Cie is ready to sell shares of its Brazil's Autometal SA unit to keep growing in the region, Chairman Antonio Pradera said.

The Bilbao, Spain-based Cie is counting on rapid growth in emerging markets to offset a drop in demand in developed countries in 2009.

Pradera adds that in 2010, it will set a “record” for sales, based on the company's nine-month performance. He says that Cie will double its 2009 sales before the target date of 2013. Cie rose 2.3 percent to EUR4.09 in Madrid trading.

The stock has advanced 22 percent in 2010, valuing the company at EUR467 million (US$614 million). Cie may buy businesses with sales of as much as BRL100 million ($58.6 million) in Brazil. Pradera adds that the company is looking at Russia, Turkey, India and China to acquire smaller companies. Pradera says that more than 95 percent of sales are outside Spain.

He says that demand in Europe won't reach 2008 levels for at least three to four years. The company, whose customers include General Motors Co., Volkswagen AG, Renault SA, Ford Motor Co., and other carmakers and auto-parts makers, said that earnings before interest, tax, depreciation and amortization will also reach a "record" in 2010. Such growth will reduce Cie's debt-to-Ebitda ratio to close to 2.5 times at the end of 2010 and to about 2 times in 2011, from 4.6 times in 2009. [via autonews - sub. required]

Topics: brazil, ipo

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