Brisa exits Brazil’s CCR for handsome return

The Portuguese firm will sell its entire stake in Brazilian toll road operator CCR for €1.2bn – roughly 6.5 times more than the €185m it spent buying into CCR in 2001. It intends to partly use the money to replicate CCR's success in other geographies.

Portuguese toll road operator Brisa will sell its entire 16.35 percent stake in listed Brazilian peer CCR, the company said in a statement.

CCR: share price up by
658% since 2002 listing

After the sale is concluded, Brisa expects to net some €1.2 billion – roughly 6.5 times more than the €185 million it spent in 2001 buying into the Brazilian company. Given that the stake’s book value is €311 million, Brisa says the total capital gain from the sale should be around €750 million.
The stake sale will be two-tiered, with Brisa having agreed to sell six percent of the shares directly to CCR’s controlling shareholders – Brazilian groups Andrade Gutierrez, Camargo Correa and Soares Penido – leaving them with 51 percent of CCR’s shares once the transaction is concluded. This will net the Portuguese company R$990 million (€450 million; $553 million).
Brisa’s remaining 10.35 percent stake will be sold through a private placement in the coming weeks, run by Santander, and should net the toll road operator around R$1.69 billion.
Vasco de Mello, Brisa’s chief executive, explained why his company decided to exit CCR:
“Brisa decided to sell its stake in CCR because we found that its growth value was not fully recognized in Brisa’s share price, nor in the research reports [written on Brisa], which left us with the options of either increasing our position or selling. Brisa had the opportunity to sell which will allow us to realize significant value.”
Perhaps as a reaction to its downgrade by ratings agency Standards & Poor’s (S&P), which lowered Brisa’s credit rating to BBB- on the back of poor growth prospects for Portugal and “less than adequate” liquidity, de Mello said the proceeds of the sale will partly be used to strengthen its balance sheet.
However, he added the sale proceeds will also be used “to finance Brisa’s future growth in other geographies, replicating the value-creating model used for CCR”. A spokesman for the company suggested India and Turkey as future areas of growth.
Brisa bought into CCR exactly one year before the company listed on the Sao Paulo stock exchange in 2002. Since then, its share price in euros has increased by 658 percent, Brisa said in a statement.