Alloha emplaca bond de US$ 350 milhões; eB Capital conversa com estratégicos

Alloha Fibra, a fiber optic service provider controlled by eB Capital, has recently raised US$350 million through the issuance of its first bond. The bond offered a yield of 12.25% and has a maturity date of February 2032. The funds will be utilized to refinance short and medium-term debts, extending the company's average debt maturity by approximately one and a half years.

The CEO, Roger Solé, explained to Brazil Journal that this is a refinancing project aimed at replacing very short-term debts that were making operations difficult due to constant concern over the next debt maturity. With a portion of the debt guaranteed by the company's network infrastructure, the bond's cost will be slightly above the CDI rate plus 4%, which is considered high but not much different from the company's capital cost, according to Eduardo Sirotsky Melzer, the CEO of eB Capital and chairman of Alloha.

The refinancing comes at a time when eB Capital is running a process to exit minority investor positions in Alloha, which currently hold 30% of the capital, and potentially combine the asset with a strategic player, sources close to the matter told Brazil Journal. Discussions have been held with TIM Brasil and V.Tal in the past, with more recent talks taking place with Zaaz, controlled by the Argentine Werthein group and owner of SKY in Brazil, although an agreement does not appear imminent.

The bond placement was led by Goldman Sachs in a consortium including Bradesco BBI, Itaú BBA, and UBS BB. During the roadshow, Solé and CFO Felipe Matsunaga discussed with over 80 investors, with demand nearing US$500 million and over 95% of the book taken by international investors. Alloha's debt stands at approximately R$2.36 billion, with a leverage ratio of 3.5x EBITDA.

About R$400 million is in short-term loans. The company had obtained a waiver last year, temporarily raising the ceiling on the debt indicator to avoid premature debt maturities. The debt results from Alloha's expansion cycle, founded on the consolidation of various regional providers. Since 2018, the company has made a series of acquisitions and expanded its presence to over 860 cities in 22 states.

However, in the past year, management shifted priorities away from growth at any cost and towards profitability, operational integration, and cash generation. Solé noted that this turnaround was a key argument presented to investors during the roadshow, emphasizing that the international market was not interested in promises or plans for future growth but wanted to see the turnaround already in progress.

According to Solé, the strategy now is not to build networks in new regions, which would require more capital expenditure and place the company in highly competitive markets. Alloha aims to grow by leveraging its existing infrastructure. The company has about 145,000 kilometers of fiber and a network serving 8.3 million residences, with a penetration rate of just 17%.

With fewer than 1.4 million customers, the company's penetration is close to 17%. Solé emphasized that the company owns a network that has already been built and paid for, which cannot be easily replicated overnight. "Our work is to monetize these assets with excellence," said Solé.