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Abu Dhabi, UAEWednesday 26 September 2018

 Argentine billionaire wants to list his cows for $2m in New York

In our regular round-up of billionaires, Jorge Brito hopes to raise money via an IPO while Lucio Tan plans to return Philippine Airlines to profit before selling a stake

 

Jorge Brito, chief executive officer of Banco Macro, plans an initial public offering of his ranching company, Inversora Juramento. Diego Levy/Bloomberg
Jorge Brito, chief executive officer of Banco Macro, plans an initial public offering of his ranching company, Inversora Juramento. Diego Levy/Bloomberg

Jorge Brito

An Argentine billionaire banker is on the verge of becoming a beef mogul.

Jorge Brito, who owns the controlling stake in Banco Macro wants to raise at least $200 million through an initial public offering of his ranching company, Inversora Juramento, in New York, he said in a an interview earlier this month from his ranch in Salta province, northwest Argentina.

Mr Brito saw ranching as a hobby when he started out in the early 1990s. But Juramento’s 65-year-old chairman and majority shareholder, whose fortune the Bloomberg Billionaires Index estimates at $1.2 billion, now has loftier ambitions. “The business has proved to be a success and the time has come to double its scale,” he said, surrounded by some of his 70,000 cows.

The company, which already trades on the Buenos Aires Stock Exchange, is seeking an investment bank to advise it regarding the sale of American depositary receipts on the NYSE. Mr Brito does not want to raise less than $200m in order to give investors liquidity. Juramento’s Argentine shares rose as much as 4.8 per cent on the news, the most since July 25.

“It’s very positive for the company and the local market to keep attracting foreign investors,” said Carlos Aszpis, an analyst at Buenos Aires-based brokerage Schweber Securities. “It not only adds depth to the market but also stimulates the trading." The company’s shares traded almost three times more than the three-month average on Monday.

Mr Brito’s move to create a beef empire by multiplying Juramento’s herd and buying up new land comes at a time when President Mauricio Macri is leaning on farmers to drive an economic recovery. Macri scrapped a beef export tax of 15 per cent when he took office in December 2015 and is in talks to ship fresh cuts to the US for the first time in about 15 years. That’s a turnaround from his predecessor, Cristina Fernandez de Kirchner, whose protectionist policies stifled the beef industry.

“Since Macri has come in, the equation has turned positive,” said Mr Brito.

Juramento’s 87,414-hectare farm is primarily set up to breed Brangus and Bradford cattle. The company uses 14,000 hectares to grow corn and soybeans, and therefore doesn’t need to buy cattle feed, Mr Brito said. While it exports premium cuts to Europe, most of its beef is sold domestically because the more than 800-mile journey to a port in Buenos Aires is expensive.

Lucio Tan is the chairman of LT Group. Noel Celis / AFP
Lucio Tan is the chairman of LT Group. Noel Celis / AFP

Lucio Tan

Billionaire Lucio Tan said he plans to return his group’s Philippine Airlines to profit before selling a stake. The announcement came just two weeks after the carrier’s president said talks with a strategic investor were likely to produce a deal by the end of this year.

Mr Tan, the Philippine’s second-richest person, is vowing to revive profit at the carrier amid an increase in tourist arrivals in the country. Philippine Airlines has been acquiring new planes and expanding destinations and flight frequencies as rising income among Filipinos boosts travel.

“While PAL needs to get back to profitability, one thing that makes it attractive for investors is Philippine tourism is picking up, giving the airlines an earnings growth driver,” said Manny Cruz, an analyst at Asiasec Equities

Tourist arrivals in the Philippines rose 13 per cent in the first half of the year to 3.36 million, according to Tourism Department data.

The LT Group chairman is seeking a strategic partner for the airline after buying San Miguel’s stake in 2014, taking control of the venture. PAL Holdings president Jaime Bautista said on August 30 the airline has been in talks with a strategic foreign investor and wants to close the deal by the year’s end.

Mr Tan, who also controls the biggest cigarette-maker in the Philippines, has seen his wealth gain about 13 per cent, or $651m this year, boosted by a 39 per cent advance in LT Group shares. The listed flagship is the holding company for his airline, banking, liquor, brewery, property and tobacco businesses.

The LT Group chairman is also preparing to hand over the reins to the conglomerate, saying he has a succession plan in place.

He declined to say who would take the helm or when they would take over. Michael Tan, his son and LT Group president, is among the likely successors, along with Lucio “Bong” Tan Jr, the son who heads the group’s Tanduay Distillers and builder Eton Properties Philippines. Son-in-law Joseph Tan Chua is president of MacroAsia , an aviation-support provider and a partner of Deutsche Lufthansa .

“Tan is still relatively hands on compared with the other tycoons of his generation,” said Paul Michael Angelo, analyst at Regina Capital in Manila. “But we shouldn’t see a major disruption on operations arising from succession, as Tan has put in place key executives and delegated key management functions.”

Mr Tan said he still gets up at 4am to play golf before a minimum eight-hour day running his conglomerate. “I am old,” said Tan. “My wish now is for an easy, easy life.”

Alexey Mordashov, billionaire and chairman of Severstal. Simon Dawson/Bloomberg
Alexey Mordashov, billionaire and chairman of Severstal. Simon Dawson/Bloomberg

Alexey Mordashov

Russia’s richest man, Alexey Mordashov, built his $18.5bn fortune from the heat and sweat of steelmaking. Now he wants to shape minds and careers from preschool to pension.

The largest shareholder in Severstal, Russia’s second-largest steelmaker by market capitalisation, is moving into online education and recruitment, setting up a unit at the end of last year that’s acquiring startup companies, as he diversifies his investments.

“Our goal is to create a platform, an ecosystem, that will help a person to develop, starting from kindergarten to retirement and beyond,” said Artem Kumpel, who heads the new recruitment and educational hi-tech division at Mordashov’s Severgroup. The billionaire is “personally involved and we are discussing investments and strategy on a monthly basis,” said Mr Kumpel, who moved from software company Abbyy in Russia in December.

Technological advances in automation, robotics and artificial intelligence are speeding up changes in the workforce worldwide, ending some jobs and pushing many to retrain for the so-called knowledge economy. Global spending on education exceeded $5 trillion in 2014, with digital learning accounting for only 2 per cent of the market, according to a report last year by EdTechXGlobal and IBIS Capital. Skeptics have pointed out fierce competition, including offerings from nonprofits, among factors that may hold growth in check.

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Severgroup seeks to build a portfolio of online educational, human-resources consultancy and recruitment companies to provide training and career development services through a person’s life, Mr Kumpel said.

Severgroup’s unit made its first acquisition in February, buying a controlling stake in online handyman referral platform Remontnik.ru. It expanded in July by purchasing recruitment optimisation platform Potok.io, followed by a stake in online training platform Netology Group. Bloomberg Billionaires Index values the internet startups at about $55m.

Mr Mordashov has set no financial limits for investing in such assets and wants to build annual revenue for the business to several billion dollars in the next five to seven years, according to Mr Kumpel. The unit may add two more companies to its portfolio this year and, while the group has started in Russia, it’s also eyeing projects in Europe and the US, he said.

Just as Amazon.com grew to become an online retailer for practically anything, “we want to become a similar marketplace in HR tech and educational tech,” Mr Kumpel said. “We have a large pipeline for acquisitions.”

Angela Leong, executive director of SJM Holdings. Jerome Favre/Bloomberg
Angela Leong, executive director of SJM Holdings. Jerome Favre/Bloomberg

Angela Leong

Hong Kong billionaire Angela Leong has bought a historic building in London’s Aldwych district for about £250m(US$338m), people with knowledge of the deal said.

Ms Leong, who is married to casino magnate Stanley Ho, has completed the purchase of Aldwych House from Rowan Asset Management and GI Partners, the people said of the confidential deal. The 174,000 square-foot building near Covent Garden has been leased to tenants including WeWork and the Roka restaurant after a recent modernisation.

A spokesman for the vendors declined to comment. Representatives for Ms Leong did not return calls and emails seeking comment.

Hong Kong investors have poured into London’s commercial real estate market following the Brexit vote, lured by the cheap pound and lower values than their domestic market. Chinese and Hong Kong buyers spent almost £4 billion (Dh19.93bn) on London commercial property in the first half of the year, up from £2.7bn in the whole of 2016, according to data compiled by broker CBRE Group.

Hong Kong-based LKK Health Products Group agreed to buy the tower known as the Walkie Talkie for £1.28bn in July and Hong Kong real estate developer C C Land Holdings paid £1.15bn for the Cheesegrater tower in May. Cindat Capital Management is joining an acquisition of QHotels Group valuing the UK hospitality company at more than £500m, people with knowledge of the matter said earlier this month.

Ms Leong, who has a net worth of $3.7bn according to the Bloomberg Billionaires Index, is executive director of SJM Holdings, Macau’s third-largest casino operator by revenue.

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