Brazil's BRF sells European, Thai operations for $340 mn
A worker during a technical inspection of the meat manufacturer JBS Seara in Lapa, Parana, Brazil, 21 March 2017. EPA- EFE/Joedson Alves
Sao Paulo, Feb 7 (efe-epa).- Brazil-based BRF, the world's largest poultry exporter, announced Thursday an agreement to sell 100 percent of its units in Thailand and Europe to Tyson International for $340 million.
The transaction remains subject to regulatory approval and to the fulfillment by the parties of the conditions set down in the contract, BRF said, describing the deal with Tyson as the final piece of a divestment program adopted last June.
"The conclusion of the divestments ensures BRF's continued deleveraging, which is our main financial priority," Lorival Luz, BRF's global chief operating officer, said in the statement.
The shedding of assets in Europe and Thailand, coupled with the earlier sale of the BRF operation in Argentina and of real estate, an inventory drawdown and an infusion of new capital via a receivables securitization fund are expected to generate $1.11 billion in total, 81 percent of the initial goal of $1.35 billion, the company said.
"We also have a solid cash position that, combined with the refinancing operations and the new loans already signed, fully covers all of the liabilities coming due in 2019," Luz said.
In recent years, anti-corruption investigations revealed that several of Brazil's biggest food-processing companies, including BRF and meatpacking giant JBS, bribed corrupt inspectors as part of a scheme to sell adulterated meat domestically or to foreign markets.
News of the scheme prompted several Asian and Latin American countries and the European Union in 2017 to impose temporary bans on the import of beef, pork and poultry from Brazil.
The EU continued to block imports from specific Brazilian plants - some belonging to BRF - in 2018.
BRF lost roughly $300 million in 2017 and the trend continued into last year, when losses for the third quarter reached $220 million.
The company said Thursday that with the monetization plan complete, it will turn its attention to "managing its businesses in markets such as Brazil and the Middle East, which were defined as priorities in the strategic planning for the next five years."
BRF, which employs more than 100,000 people at home and abroad, sells products in more than 150 countries.