Company’s divestment plan already amounts to approximately R$1.9 billion with the sale of the second asset in Argentina and the structuring of the Receivables Backed Investment Fund
BRF announced this morning three important operations in its ongoing deleveraging process: the sale of Avex in Argentina; new bank loan operations to extend the company’s debt maturity profile; and the structuring of a Receivables Backed Investment Fund (FIDC). The high demand, which reached almost R$2 billion, enabled the Company to increase the fund size, initially estimated at R$750 million, to R$875 million. Furthermore, the coupon for senior shares was reduced from CDI + 1.30% p.a. to CDI + 0.90% p.a.
The agreements already signed under the company’s Operational and Financial Restructuring Plan so far amount to approximately R$1.9 billion of the R$5 billion established in said plan. Negotiations are going on for the sale of the assets of Campo Austral in Argentina and the company’s operations in Europe and Thailand. “In the case of Campo Austral, we are already in an advanced stage of negotiations with prospective buyers and will make an announcement at opportune moment,” said Lorival Luz, Global COO of BRF.
“Since the strategy was to prioritize the divestment of Argentine assets as there were bigger doubts about the speed of executing the transaction, we decided to postpone by a week the delivery of the binding offers from Europe and Thailand,” he explained. Offers will be received until the end of this week and contractual negotiations will take place early next year. “The process remains quite competitive, with 5 different players contending for the assets. We expect this process to be concluded in January,” emphasized Lorival.
The sale of Aves to Granja Tres Arroyos S.A. and Fribel S.A. includes three plants: Rio Cuarto, with primary processing capacity of 160,000 birds per day; Llavallol and Villa Mercedes, which jointly process per month over 10,000 tons of products, including margarines, sauces, olive oil and baking ingredients under brands such as Dánica, Manty, Delicia and D’Fiesta, among others. The total sale amount was US$50 million. This is BRF’s second sale in Argentina, which is still negotiating the sale of Campo Austral, a producer of beef and pork products.
BRF also announced the structuring of the Receivables Backed Investment Fund (FIDC), whose sole purpose is to acquire credit rights originated from commercial transactions between the company and its clients in Brazil. The parties involved were successful in the initial distribution of shares, which were split into three distinct classes and reached an aggregate volume of R$875 million. This amount surpassed the initial projection of R$750 million previously announced by BRF.
In addition, the company signed new banking operations that, between rollovers and new operations, totaled a little over R$1 billion, improving our debt profile next year. With this, the company successfully concluded yet another phase of its Operational and Financial Restructuring Plan announced in a Material Fact notice on June 29, 2018, which envisaged the monetization of nearly R$5 billion through several initiatives.
Avex is the undisputed leader in the Argentine margarines market and exports frozen chicken cuts to over 40 countries. It also produces mayonnaise and sauces such as mustard and ketchup. Avex, which employs some 800 people and has been in the Argentine market since 1950, owns leading brands such as Dánica, Manty, Delicia, D’Fiesta and Sierra Sur. It has three production units located in Rio Cuarto, Llavallol and Villa Mercedes.
With an extensive portfolio of products and established brands such as Sadia, Perdigão and Qualy, BRF employs more than 100,000 people who are committed to management, quality and innovation in the production of its products. Present in over 140 countries, the company is internationally renowned for performing its operations based on growth and sustainable development. With a history of over 80 years, it produces food items that are the source of strength to put life in motion, every day, for the largest number of people in the world.