By Tatiana Bautzer
SAO PAULO (Reuters) - Brazilian homebuilder MRV Engenharia e Participacoes is looking for a partner for its U.S. subsidiary AHS Residential to fund its expansion, CFO Ricardo Paixao Rodrigues told Reuters in an interview.
MRV will meet investors to discuss the project this week in New York, during a Latin American conference hosted by Itau BBA, the investment banking unit of Itau Unibanco Holding SA.
The private placement would finance AHS expansion and would be the first step before an initial public offering of the unit, MRV CFO added.
Founded in 2012 and acquired by MRV in 2019, AHS Residential builds, leases and sells apartment complexes in southern U.S. states.
Last year, AHS sold 7 developments with 1,486 units worth around $ 350 million. Ten developments under construction with more than 3,000 units may reach a $ 915 million sales value, according to MRV financial statements, and current AHS land bank is enough to produce more than 7,000 units.
MRV is looking for an outisde investor investor to fund AHS' expansion, as the subsidiary's growth and the devaluation of local currency against the dollar made difficult for the parent to finance it.
According to MRV's financial statements, AHS Residential was valued at $474 million in December, whereas its parent has a market capitalization of 5.17 billion reais ($1 billion).
MRV's CFO says a new investor in the subsidiary, of which MRV currently owns 94.5%, would help to accelerate AHS' growth. The investor would acquire a stake buying new shares in AHS, with no payments to shareholders. Rodrigues declined to disclose the size of the stake MRV is planning to offer to investors.
An initial public offering in the U.S. may be considered once the company reaches a larger size in revenue and projects, Rodrigues added.
($1 = 5.0255 reais)