Tuesday, September 15, 2009

Gafisa (GFA) Denies any Plans to Issue Shares in 2009, but Interested in Debt Offerings

Gafisa (GFA) made a pitstop about 2 weeks ago - it was a nice opportunity to add shares and I wish more companies would have some news item that let us jump in on pullbacks - that is more our style. [Sep 2, 2009: Gafisa Downgraded on Potential Share Offering] While thankful for the opportunity to get part of our position back near $26, we obviously did not buy enough as the stock has made a U turn and surged nearly back to recent highs; that's a quick 20% return in under 2 weeks.

Gafisa says the return to relative health of credit markets will allow it to raise money via debt offerings; while a share offering might come in the future - it won't happen in 2009.

Via Bloomberg:
  • Gafisa SA, Brazil’s second-largest homebuilder, may sell bonds in the domestic market this year, taking advantage of record low interest rates to repay maturing debt, said Chief Financial Officer Duilio Calciolari. “Because liquidity is increasing, we’re seeing more options for the company, like issuing additional bonds,” Calciolari said in an interview in New York. “It’s a matter of opportunity. Now that we have lower costs, we can refinance our short-term debt.”
  • The Sao Paulo-based company sold 250 million reais ($137 million) of 2-year floating-rate notes in the local market last month, according to Bloomberg data. Gafisa will have 509 million reais in maturing debt by June 2010, according to company documents.
  • The homebuilder has no plans to sell shares this year, he said. Gafisa’s rivals Rossi Residencial SA and PDG Realty SA Empreendimentos e Participacoes have announced share sales this year, heightening speculation Gafisa would follow. “There’s a chance we’ll sell shares in the future but not this year,” Calciolari said.
  • The company’s revenue from low-income housing may increase to as much as 60 percent next year from the current 50 percent, he said.
  • Sales may grow 15 percent this year and 25 percent in 2010, according to Calciolari. “There’s a huge demand for housing, especially for the low-income sector.
  • Prices for high-end homes have recovered to pre-crisis levels, he said.
[Aug 3, 2009: Gafisa Earnings Weaker than Expected, Does not Matter]
[Mar 30, 2009: Restarting Gafisa as Sam Zell Increases Stake]
[Oct 22, 2008: Sam Zell Increases Stake to Gafisa to 18.7%]
[Aug 17, 2008: Gafisa Earnings]
[Nov 19, 2007: Initiated a Position in Gafisa - Brazilian Homebuilder]

Long Gafisa in fund; no personal position

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