Nova Cedae presses ahead with 2012 IPO plans

A 29% rise in the combined market capitalisation of Brazil’s quoted water stocks this year has bolstered Nova Cedae’s plans to price an initial public offering before the end of the year.

The Rio de Janeiro water utility, which is currently 99% owned by the state of Rio de Janeiro, is in the process of assembling an international team of legal advisors, and is expected to float between 25% and 48% of its shares on the stock exchange in a move which could raise in excess of $800 million, according to analysts.

Following internal financial restructuring, Nova Cedae is a different animal to when it last looked to float back in 2009. EBITDA rose 8.5% to BRL971 million ($479 million) on gross revenues of BRL3.5 billion ($1.7 billion) last year, although its cash position dwindled away to almost nothing as net debt climbed by 14.1% to BRL2.4 billion ($1.2 billion).