Beef Scandal: JBS Selling U.S. Feedlots


SAO PAULO/CHICAGO By Tatian Bautzer and Micheal Hirtzer 

Brazilian meatpacker JBS SA revealed a $1.8 billion divestment plan on Tuesday, putting dairy, poultry and cattle feeding assets on the block to cut debt after a corruption scandal raised concerns about its financing costs.

JBS, whose controlling shareholder recently agreed to pay a massive leniency fine after becoming embroiled in sweeping graft probes that have ensnared politicians and executives, said in a securities filing that its board and state development bank BNDES still had to approve the planned asset sales.

The plan, which aims to raise 6 billion reais ($1.8 billion), includes a 19.2 percent stake in Brazil-based dairy company Vigor Alimentos SA, along with its Northern Ireland unit Moy Park and Five Rivers Cattle Feeding in North America.

Five Rivers has a combined feeding capacity of more than 980,000 head of cattle and locations in Colorado, Kansas, Oklahoma, Texas, Arizona, and Idaho, according to its website. Five Rivers also manages a 75,000-head capacity feedyard in the Canadian province of Alberta.

U.S. feeder cattle futures fell to nearly a two-month low of 140.775 cents per pound after the JBS announcement, before rebounding to trade down 1.625 cents at 143.175 cents. JBS shares were down 3.46 percent at 6.13 reais in early afternoon trading in Sao Paulo.

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Picture: Northern Ag Network

Reuters 2017

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