Itausa SA, a Brazilian investment firm, announced on Wednesday that it had sold 12 million class A shares in XP Inc for about 1.8 billion Brazilian real ($366.58 million). Reuters reports that the company holds 11.51% of the brokerage’s total capital.

XP was sold as part of Itausa’s strategy to lower its stake and raise additional capital during 2022, as CEO Alfredo Setubal said last month that the company would continue selling shares.

Itausa reiterated its strategy on Wednesday, saying that it still expects to sell 24 million shares of XP this year as it sees it as a non-strategic asset. Following its recent investments, the holding company noted it is in need of rebuilding its cash position.

According to Itausa, the deal is expected to have a positive impact of about 1.1 billion Brazilian real on earnings in the first quarter of this year, at least that is what it stated in a securities filing.

XP Inc IPO's Plans Background

In 2019, XP Inc., Brazil’s largest stockbroker, was expected to raise between $1.5 billion and $2.1 billion on Nasdaq in what could be the biggest initial public offering for a Brazilian company.

The company planned to price its public offering at around the midpoint of its expected price range. XP had set a range last month of $22 and $25 per share, and at the midpoint, it would be valued at about $14 billion.

According to its IPO’s preliminary prospectus, XP, which is based in Sao Paulo and incorporated in the Cayman Islands, wants “to invest in new financial services verticals that we plan to enter or have recently entered into, such as digital banking, Payments and insurance, to fund potential future acquisition opportunities.”

At that time, Brazil’s largest bank Itaú Unibanco paid $1.9 billion in 2017 to buy a 49.9 percent stake in XP Investimentos SA and options to acquire full control in the future. However, the lender said it does not plan to divest any of its holdings. Instead, General Atlantic and Dynamo VC Administradora de Recursos Ltda., which hold a combined 20%, as well as XP managing partners, who own about 30%, could sell up to 72.5 million class A shares.

Itausa SA, a Brazilian investment firm, announced on Wednesday that it had sold 12 million class A shares in XP Inc for about 1.8 billion Brazilian real ($366.58 million). Reuters reports that the company holds 11.51% of the brokerage’s total capital.

XP was sold as part of Itausa’s strategy to lower its stake and raise additional capital during 2022, as CEO Alfredo Setubal said last month that the company would continue selling shares.

Itausa reiterated its strategy on Wednesday, saying that it still expects to sell 24 million shares of XP this year as it sees it as a non-strategic asset. Following its recent investments, the holding company noted it is in need of rebuilding its cash position.

According to Itausa, the deal is expected to have a positive impact of about 1.1 billion Brazilian real on earnings in the first quarter of this year, at least that is what it stated in a securities filing.

XP Inc IPO's Plans Background

In 2019, XP Inc., Brazil’s largest stockbroker, was expected to raise between $1.5 billion and $2.1 billion on Nasdaq in what could be the biggest initial public offering for a Brazilian company.

The company planned to price its public offering at around the midpoint of its expected price range. XP had set a range last month of $22 and $25 per share, and at the midpoint, it would be valued at about $14 billion.

According to its IPO’s preliminary prospectus, XP, which is based in Sao Paulo and incorporated in the Cayman Islands, wants “to invest in new financial services verticals that we plan to enter or have recently entered into, such as digital banking, Payments and insurance, to fund potential future acquisition opportunities.”

At that time, Brazil’s largest bank Itaú Unibanco paid $1.9 billion in 2017 to buy a 49.9 percent stake in XP Investimentos SA and options to acquire full control in the future. However, the lender said it does not plan to divest any of its holdings. Instead, General Atlantic and Dynamo VC Administradora de Recursos Ltda., which hold a combined 20%, as well as XP managing partners, who own about 30%, could sell up to 72.5 million class A shares.