BUENOS AIRES (Dow Jones)–Argentina’s Industry Ministry expects more small companies to raise money on the local capital market next year following an initial public offering by a foods company earlier this month.
«Since early 2011 [the ministry] has been working to bring small firms to the market. It’s expected that in the first quarter of 2012, about 20 companies will be in a position to go to the bourse,» Industry Minister Debora Giorgi told Dow Jones Newswires in an emailed statement Wednesday.
Those listings will probably be a mix of shares and debt securities, though bonds will likely account for most of the volume, she said.
Giorgi said the ministry is currently working with companies in the auto parts, agriculture, chemicals and pharmaceutical sectors.
Ovoprot Internacional SA (OVOP.BA), a producer of egg products, sold 3.3 million shares for about 30 million pesos ($7.1 million) on the Buenos Aires Stock Exchange last week.
The Fondo Comun de Inversiones, a fund set up by the Industry Ministry and the national pension agency, Anses, to invest in securities sold by small- and medium-size manufacturing companies, purchased Ovoprot shares.
Today, the fund has more than ARS100 million in assets under management, according to the ministry.
«Our ministry accompanies small- and medium-size firms through the entire process of going to the capital markets, as was the case with Ovoprot,» the minister said.
The volume of corporate bonds and asset-backed securities sold on the local capital market more than doubled to ARS15.38 billion during the first half of 2011 as a booming economy spurred companies to seek financing.
But IPOs have been few and far between in the last decade due in part to the lack of domestic investors and the reluctance of closely held firms to open their books to outsiders.
In the last 12 months, three companies, including Ovoprot and real-estate company TGLT SA (TGLT.BA), have listed shares through an IPO.
-By Ken Parks, Dow Jones Newswires; 54-11-4103-6740, ken.parks@dowjones.com
Source: online.wsj.com