New CEO at Brazilian homebuilder Gafisa targets leverage reduction, cash flow

By Tatiana Bautzer

SAO PAULO, Sept 29 (Reuters) - The new chief executive officer of Brazilian homebuilder Gafisa SA said a potential follow-on share offering is part of a larger plan to reduce leverage and increase profitability.

Henrique Blecher, appointed as CEO three weeks ago after selling a homebuilder he founded to Gafisa, declined to comment on how much the company could raise, but said he was not worried about the 19% drop in Gafisa shares on Monday, after the company said it was considering the share offering.

"It's a normal reaction to a potential follow on", Blecher said in an interview in the company's headquarters.

The new CEO said the accumulated 56.6% so far this year is not very different from its listed peers. "Interest rates are high and demand fell, so Gafisa is not the only one losing value".

Blecher added the offering would be part of a larger strategy to reprofile Gafisa's debt, increase cash flow and profitability. The company had 1 billion reais ($185 million) in net debt in June and lost 30 million reais ($5.5 million) in the first half of 2022. The Gafisa CEO aims to attract investors instead of banks to finance development of projects.

The CEO aims to attract financing from family offices and funds, with structures mixing debt and equity that were used by Bait, the company he founded, to increase profitability.

Bait was focused on upscale residential buildings in Rio de Janeiro, and Blecher is now in charge of increasing Gafisa's presence in the premium segment in Sao Paulo, Brazil's largest city, where Gafisa is based. The strategy will be eased by the debt reprofiling, he added. ($1 = 5.4031 reais) (Reporting by Tatiana Bautzer Editing by Alistair Bell)