Milbank in São Paulo and New York and Pinheiro Guimarães in São Paulo have helped the mining unit of Brazilian steelmaker CSN raise 5.2 billion reais (US$968 million) in an initial public offering on the B3 stock exchange, the largest Brazilian IPO so far in 2021.

The placement agents turned to Cleary Gottlieb Steen & Hamilton LLP in São Paulo and New York and Brazil’s Machado Meyer Advogados. The deal closed on Friday.

CSN Mineração sold 614 million shares across a primary and secondary offering. The shares sold for 8.5 reais (US$1.57) each, which was at the lower end of the expected price range.

The company raised 1.4 billion reais (US$259 million) in the primary offering, the proceeds of which CSN Mineração will use for the expansion of mining projects and port terminals. As part of the company’s strategy, CSN Mineração aims to increase its iron ore production to 108 million tonnes by 2033, up from 33 million currently.

The remaining share of the proceeds will go to selling stakeholders, of which parent company CSN will receive the largest portion. It intends to use the money to pay off debt.

CSN reduced its stake in its subsidiary from 87.5% to some 79% through the deal.

CSN Mineração is Brazil’s second largest iron ore exporter after Vale and the sixth largest in the world. The company has most of its assets in the Brazilian Iron Quadrangle, in the south of the state of Minas Gerais. The area is known for its large deposits of iron ore, gold and diamonds.

CSN Mineração’s offering is the largest IPO by a Brazilian company so far in 2021, ahead of private equity company Patria Investimentos’ US$588 million transaction in January. Several other Brazilian IPOs have taken place in February alone. Earlier this month, interior design company Westwing raised US$193 million in an offering, while mobile technology company Bemobi made a US$234 million offering days earlier. Other examples of recent issuers include Lorry rental company Vamos, energy company Focus Energia and asset manager Vince Partners.

Counsel to CSN Mineração

  • Milbank: Partner Tobias Stirnberg and associates Alexia Raad and Mateus Costa Ribeiro in São Paulo, and partners Andrew Walker and Catherine Leef Martin, and associates David Hanno New York
  • Pinheiro Guimarães: Partners Francisco José Pinheiro Guimarães, Ivie Moura Alves and Mariana Silveira Martins Jost, and associates Conrado de Almeida Sampaio Davoli, Lucas Manzoli de Almeida and Alexandre Vendramini Sampaio in São Paulo

Counsel to Bradesco, BTG Pactual, BofA, Citigroup, Fibra, Jefferies, JP Morgan, Morgan Stanley, Safra, Santander, UBS, and XP

  • Cleary Gottlieb Steen & Hamilton LLP: Partner Juan Giráldez in São Paulo, and counsel Jonathan Gifford and associates Rita Sobral and Sofia Falzoni in New York

(Latin Lawyer - 24.02.2021)