Just hours after closing the order book, Athena Foods decided to postpone its long-awaited opening at the Santiago Stock Exchange. "We started talking to investors and they started to change prices", explains finance director Eduardo Puzziello. After the operation's fall, Minerva's subsidiary defined its next steps: to postpone two acquisitions in Chile and new purchases in Colombia.
"We have a deal", was what Eduardo Puzziello, CFO of Athena Foods, told the company's president on Friday, May 10. That day, he had held a meeting with investors who had filled him with optimism about the opening of the stock market that they expected to realize on Tuesday. On Monday, however, the operation was reduced; on that day the price was fixed and the adverse external scenario hit them.
On Friday, “the investors said they want to put in US$ 40 million, US$ 30 million, US$ 50 million”, says Puzziello when talking about the postponed IPO of the Chilean subsidiary of Brazilian meat company Minerva, which operates in Chile, Argentina, Paraguay, Uruguay and Colombia. And recalls: “During the weekend the disaster for global markets began”, after the increase in trade tensions between the United States and China.
In the midst of a strong climate of risk aversion that day, Athena Foods saw her order book shrink by the minute. “On Monday morning we still had the book, but during the day the offers began to fall and the price to fall. It's crazy, because one day we have a good deal and the next day we didn't have anymore”, says Puzziello.
Faced with a sense of prudence, the price penalty imposed by AFP, fund managers and retail investors has reached an unsustainable level for Athena Foods. The fact that this is a new sector in the local market has been added to this picture. “I've come a lot to Chile to talk to debt investors about Minerva bonds, and they know a lot about the sector. But on the stock side, a few know about the protein sector”, highlighted Puzziello. And with all these variables, the decision was clear: postpone the opening. And reschedule the plans.
Growth is slowed down
The company sought to raise around US$ 400 million, of which some US$ 260 million would be sent to the parent company to reduce debt. The rest was going to be allocated to the growth of its operations. With this new scenario, where the company does not have the planned capital, the slogan is to postpone projects. “We have a business plan that we must fulfill. Much of Athena's plan was related to acquisitions. With what happened, we will postpone the conversations we had scheduled with some targets in Colombia and Chile”, explains Puzziello.
Specifically, Minerva's subsidiary will leave pending two plans for acquisitions of distributors in Chile, new purchases in Colombia, in addition to its project to enter small and medium retailers in the domestic market.
In Argentina, Athena Foods has five slaughter plants, but only one operation, so it is analyzing the possibility of reopening another. “We will increase the capacity of our plants, we are running at 72% and we can increase it to more than 80%”, highlights the executive. He adds: “By 2020 we guarantee the volume, but if we have increased our operations in Argentina and made acquisitions in Chile and Colombia, our production would have accelerated. That will be achieved by the end of next year or the beginning of 2021”, says Puzziello.
Despite this, although Athena Foods regrets the decision to postpone the operation, it discards the existence of negative impacts. “We do not see it as a failure, an IPO is not an easy operation and one of the most important things is the moment. It was bad luck, we hit the worst day of the year”, says Puzziello.
Thus, less than a week before the bitter Monday, Athena Foods has already resumed talks with the banks that advise it. And Puzziello emphasizes that the interest of carrying out the IPO on the national stock exchange remains valid. In fact, he has already held meetings with the board and the executive director to define the steps to follow. “But it's very recent, we want to wait and see what happens. We have time and in Minerva there is no hurry”, he concludes.