Brazil's Compass Gas e Energia BMFBOVESPA:PASS3, a unit of conglomerate Cosan BMFBOVESPA:CSAN3, announced a secondary offering of about 89.3 million shares on Tuesday, which it said was set to raise at least 2.5 billion reais ($501.69 million).
Price per share will range from 28 reais to 35 reais, Compass said in a securities filing.
Pricing will be disclosed on May 7.
Selling shareholders include Cosan, Atmos, Bradesco BMFBOVESPA:BBDC3, Brasil Capital and the Bussola group.
BTG Pactual, Bank of America, Bradesco BBI, Citi, Itau BBA, Santander, JPMorgan, XP, BNP Paribas and UBS BB will act as bookrunners.
The deal will in practice represent Compass' initial public offering, as part of a broader deleveraging push by Cosan.
Cosan said in a separate filing it may dispose of shares representing about 15% of Compass' share capital.
Natural gas distributor Compass had filed for IPO in March.
($1 = 4.9832 reais)