After a spectacular reorganization and recovery over the past few years, Vulcabras Azaleia is going public again, pricing the 68,420,000 shares offered at 9.50 reais each in order to raise net proceeds of R$550 million (€143.8m-$168.8m). The total proceeds may increase by R$71.8 million (€18.8m-$22.0m) if an over-allotment option for a further 7,894,000 shares is exercised through a secondary offering by Nov. 28. The price is in the middle of the range of R$8.50 to R$10.50 that had been set last month by institutional investors.

The shares are being sold by Suez and other institutional investors. The initial public offering on the Brazilian stock exchange in São Paulo was oversubscribed two times over. The value of Vulcabras' shares has risen sharply since last July, when they were still worth around R$5.50.

Prior to the IPO, only 1.79 percent of the shares had been trading publicly on the exchange, down from 9 percent prior to 2011, when it tried in vain to offer more shares to the public. Instead, its controlling shareholders made an injection of R$350 million (€91.5m-$107.4m) in 2012 to save the company from bankruptcy proceedings.

The IPO values Vulcabras at about R$1.8 billion (€470.7m-$552.5m), compared with around R$8 billion for Grendene, the Brazilian manufacturer of rubber sandals and other types of shoes. Pedro Grendene Bertelle remains the controlling shareholder of Vulcabras. His twin brother, Alexandre Grendene, controls Grendene.

Credit Suisse, Banco Bradesco, Banco BTG Pactual and Bank of America Merrill Lynch acted as joint bookrunners. Mattos Filho, Veiga Filho, Marrey Jr. & Quiroga, Milbank, Souza, Cescon, Barrieu & Flesch and Davis Polk & Wardwell advised on the transaction.

Under new management, Vulcabras' net debt has been reduced to around R$400 million (€104.6m-$122.8m), or 2.5 times Ebitda. The company reported positive figures last year for the first time in six years, and the results have continued to improve since then.

With a domestic market share estimated at 12 percent in volume, up from 4.3 percent in 2014, Olympikus has been performing particularly well in the Brazilian sports shoe market, thanks in part to strong demand for its low-priced products in view of the difficult conditions of the Brazilian economy. The brand represented 82 percent of the company's total sales of R$495 million (€129.4m-$151.9m) during the first six months of this year.

The group's two other brands, which target women in different age group, Azaleia and Dijean, have been performing less well.

The Vulcabras group posted a gross margin of 37.5 percent and an Ebitda margin of 23.5 percent on total sales of R$604.5 million (€158.1m-$185.6m) during the six-month period, ending up with net income of R$77.6 million (€20.3m-$23.8m).

In the third quarter ended Sept. 30, the group's net profit reached R$19.3 million (€5.0m-$5.9m) on an 11.5 percent sales increase to R$344 million (€90.0m-$105.6m). The gross margin was 3.2 percentage points higher than a year ago at 39.5 percent. The Ebitda margin was up by 6.2 percentage points to 24.4 percent.

The financial recovery of Vulcabras has come after its closure of 25 of its 29 manufacturing plants in Brazil and the reduction in its staff from 38,000 to about 13,000 people. Most of the 25 million pairs of shoes it sells every year are still made for the most part at its own factories.

Founded in 1952, Vulcabras started representing Reebok in Brazil in 1992, and the contract was enlarged later on to include some other Latin American countries, but Adidas stopped the relationship in 2015. The group ran into financial trouble mainly because it insisted on making its sports shoes in Brazil after its acquisition in 2007 of Azaleia, along with its Olympikus brand. Its insistence led the Brazilian government to impose anti-dumping duties on shoes imported from China.