SAO PAULO (Bloomberg) — Laep Investments, a Bermuda-based private equity fund that controls the Brazilian unit of Parmalat SpA, plans to raise as much as 1.21 billion reais ($669 million) in an initial offering later this month.

Laep intends to sell 67.7m depositary receipts, the type of stock foreign companies list to trade in Brazil, for 11.5 reais to 15.5 reais each, the company said in a statement published today in Valor Economico newspaper. Existing shareholders may offer an additional 10.15m at the same price if demand exceeds supply, the company said.

Laep is among private equity funds building war chests by taking advantage of the appetite, mainly from international investors, for Brazilian companies' rising shares and earnings growth.

"Investors are using share offerings to increase their exposure to Brazilian assets," said Renato Pascon, who helps manage four billion reais at Banco Alfa de Investimento SA. "The prospect of high returns is stimulating the appetite."

The money raised will be used to pay debt associated with recent acquisitions and finance other takeovers in the sale and distribution of dairy products, Laep said in its preliminary prospectus published on the regulator's web site.

The shareholders allowed to sell stocks in the offering include Laep Fund, North Sea Capital LLC, Brown Mountains Investments LLC and Mamootot LLC. Laep declined to comment through its public relations company, FSB Comunicacoes, citing a quiet period imposed by regulators before the offering.

Banco UBS Pactual SA, the Latin American investment-banking unit of UBS AG, is managing the sale. The stock is scheduled to start trading on October 29 at the Sao Paulo stock exchange under the ticker of MILK11, according to the statement.

Laep was founded in 1994 by investors Marcus Elias and Eduardo Aguinaga de Moraes, who took control of Parmalat's Brazilian unit in May 2006 after pledging to repay the company's $50m bank debt.