Bloomberg — BRF SA (BRFS, BRFS3), Brazil’s biggest poultry producer, has raised 5.4 billion reais ($1.1 billion) in a share offering that lured investors including Saudi Agricultural and Livestock Investment Co.
The company said it sold 500 million new shares at 9 reais apiece, a 5.7% discount to Thursday’s closing price, confirming an earlier Bloomberg report. An additional allotment of 100 million new shares was also sold.
The deal, Brazil’s biggest equity offering so far this year, drew interest from both Saudi Arabia’s state-owned fund and beef producer Marfrig Global Foods SA. Salic bought 180 million shares, while Marfrig scooped up roughly 200 million shares, maintaining its stake in BRF at around 33.3%, according to a regulatory filing.
Marcos Molina dos Santos, the meat tycoon who founded Marfrig about two decades ago, has been taking steps toward the combination of the protein producers, which he called “sister companies” in an interview with Bloomberg News earlier this year.
BRF, one of the world’s biggest poultry exporters, is selling assets to reduce leverage amid a business overhaul that started after Molina became its biggest investor. The share sale will accelerate attempts to reduce its net debt, which stood at 15.3 billion reais as of last March.
After the deal, the company’s net debt-to-adjusted Ebitda ratio may drop to 2.2 times, down from 3.4 times in the first quarter, Lucror Analytics credit analyst Josseline Jenssen wrote in a note, reaffirming a buy recommendation for the company’s dollar bonds.
JPMorgan Chase & Co. was the leading coordinator for the transaction. Other underwriters were Banco Bradesco BBI, Banco BTG Pactual, Citigroup, Banco Itau BBA, Banco Safra, UBS BB and XP Investimentos.
--With assistance from Gerson Freitas Jr.
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