Bloomberg News

PDG Realty Rises as Shareholders Approve New Capital Injection

July 13, 2012

PDG Realty SA Empreendimentos e Participacoes, Brazil’s biggest homebuilder, is poised for its highest closing price in a week after shareholders approved an 800 million-real ($392.6 million) capital injection to bolster its finances.

Shares gained 3.7 percent to 3.33 reais at 2 p.m. in Sao Paulo. A close at that level would be the highest since July 6. The BM&FBovespa Real Estate Index rose 0.6 percent.

PDG’s shareholders approved a capitalization from the investment fund Vinci Partners Investimentos Ltda. at a meeting yesterday, according to a regulatory filing. Earlier this week, PDG cut its new-project target for 2012 to a range of 4 billion reais to 5 billion reais, from 8 billion reais to 9 billion reais, citing a slowdown in demand.

“The capitalization, coupled with the material reduction in 2012 launches guidance, seem to be important moves toward a more comfortable financial position,” Alexandre Amson, an analyst at Banco Santander Brasil SA, said in a note to clients dated today. “The capitalization optimizes PDG’s capital structure, reducing net debt-to-equity from approximately 80 percent to approximately 60 percent.”

PDG has retreated 46 percent this year through yesterday while the Bovespa slid 5.9 percent.

To contact the reporter on this story: Denyse Godoy in Sao Paulo at dgodoy2@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net


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