Compass is poised to end Brazil's nearly five-year IPO drought (updated)

Cosan

07/05/2026 21:16

Updates May 7 story with company confirmation

By Luciana Magalhaes

SAO PAULO, May 8 (Reuters) - Compass Gas e Energia, controlled by conglomerate Cosan CSAN3.SA, priced its 3.2 billion reais ($650 million) initial public offering on Thursday, ending a nearly five-year IPO drought on Brazil's B3 stock exchange.

Shares in the Brazilian gas distribution and energy company were set at 28 reais apiece, a securities filing showed on Friday.

The deal is the first IPO on Brazil's stock exchange since September 2021, when companies including Raizen RAIZ4.SA, the world's largest sugar producer, went public.

Reuters reported ahead of the pricing, citing two sources familiar with the deal, that Compass was likely to raise about 3 billion reais and, despite strong demand, pricing could land at the lower end of the 28-35 reais per share range.

        The initial offer totalled 2.8 billion reais and was increased to 3.2 billion reais through additional shares issued to meet excess demand.

The Compass offering is part of Cosan's broader push to sell assets and cut debt, as high interest rates have weighed on the group's results.

Cosan will use about 75% of the IPO proceeds to pay down debt, one of the sources said.

Cosan had planned an IPO for Compass in 2020 but shelved it due to unfavorable market conditions.

Despite the prolonged domestic IPO drought, Brazilian companies such as PicPay PICS.O, a digital bank owned by the Batista family, and fintech Agibank AGBK.N have listed shares on U.S. exchanges.

But high interest rates and concerns over Brazil's fiscal outlook have deterred several companies from going public in recent years.

($1 = 4.9289 reais)

 (Reporting by Luciana Magalhaes. Additional reporting by Gabriel Araujo. Editing by Cynthia Osterman, Chris Reese and Mark Potter)

 ((Luciana.NovaesMagalhaes@thomsonreuters.com;))