Recent changes at Brazil’s largest travel agency include a new CEO, a new chief financial officer, and a $15 million capital injection from its founder. CVC now plans a $60-million-plus share offering. Other global travel companies or private equity firms may take part.
Brazilian travel operator CVC has engaged financial and legal advisers to study a potential follow-on share offering and is in talks with “strategic investors”, the company said on Friday, driving its shares over 11% up.
The announcement follows CVC’s debt restructuring deal in March with debenture holders to cut gross debt, which entailed an obligation for a capital increase of at least 125 million reais ($25.21 million) by November.
Shares of CVC jumped more than 11% on the news, making it the top gainer on Brazil’s benchmark stock index Bovespa, which was up around 2%.
CVC Brasil Operadora e Agencia de Viagens SA, as the firm is formally known, was responding in a securities filing to a report by financial website Brazil Journal saying that founder Guilherme Paulus was discussing an investment in the company.
Brazil Journal, citing sources familiar with the matter, reported that the share offering could reach 300 million reais.
Without mentioning Paulus by name, CVC said it was in talks with “potential strategic investors” about them participating in the offering if it goes forward, but noted that no binding agreement had been reached so far.
It also added there was still no decision on the amount or conditions for the offering.
CVC in June 2022 raised 403 million reais in a share offering priced at a sharp discount to closing prices, citing at the time the need for capital amid a gradual recovery in the tourism industry following the COVID-19 pandemic.
In addition to the potential new offering, CVC has also been searching for a new chief executive after Leonel Andrade resigned last week, more than three years into his tenure.
($1 = 4.9748 reais)
(Reporting by Gabriel Araujo; Editing by Jason Neely, Steven Grattan and Emelia Sithole-Matarise)