Banco do Brasil Insurance Unit IPO Suspended for 30 Days

Brazil’s securities regulator CVM on Monday suspended the initial public offering of Banco do Brasil SA’s insurance unit BB Seguridade for 30 days, citing irregularities in the use of advertising materials.

The offer could be canceled if the irregularities are not resolved within this period, CVM added, without giving details.

State-run Banco do Brasil, the country’s largest in terms of assets, plans to raise up to 12.15 billion reais ($6 billion) in the BB Seguridade IPO. That might be the largest IPO in Brazil since 2009, when Banco Santander Brasil raised 14 billion reais [$7.08 billion].

The pricing was scheduled to take place on April 23.

Banco do Brasil shares dropped 1.1 percent to 28.04 reais [$14.18] on the Sao Paulo stock exchange. Despite the fall, it outperformed the benchmark Bovespa index, which slipped 1.7 percent on concerns about economic growth in China.

Banco do Brasil’s investment-banking unit is handling the transaction, with co-managers Banco Bradesco SA, Itaú Unibanco Holding SA, and JPMorgan Chase & Co. Other investment banks hired to help handle the deal include BTG Pactual Group, Banco Votorantim SA, Citigroup Inc and São Paulo-based Brasil Plural Banco Multiplo.