BRF to sell assets outside Brazil, restructure operations
Staff Writer |
Brazil's BRF, one of the world's largest pork and poultry processors, announced a large restructuring plan that includes selling operations in Europe, Argentina and Thailand to cut debt.
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In a securities filing and a conference call with investors and analysts, the company said it will adjust operations in 22 of its 35 plants to match production to smaller demand. It plans to raise 5 billion reais with asset sales and securitization of receivables.
BRF has seen a series of dramatic changes as poor results and a federal investigation into practices to evade food safety checks brought down directors and led shareholders to demand a complete overhaul af the company's management.
Last month, Pedro Parente, formerly at state-controlled oil company Petrobras, took over as chief executive. The restructuring plan, approved by the board on Friday, is his first major move to try to turn the company over.
Parente said on the conference call that the plan will adjust BRF's operations "to current demand, which has been reduced".
The company has been affected by a decision from the European Union to ban several Brazilian meat products, a result of the investigation into the country's food safety system.
BRF said it would cut 5 percent of its workforce in Brazil as a result of adjustments to its plants, or around 4,000 people if using information on the company's website.
Earlier on Friday, BRF said it would raise about 500 million reais ($130 million) from non-core asset sales including forestry land and real estate, said Eduardo Takeiti, head of investor relations.
Parente said BRF would target a leverage ratio of 4.35 times EBITDA at the end of the year and 3 times in December 2019.
BRF entered Argentina in 2012 when it acquired a 90.05 percent interest in Quickfood under an asset swap agreement with Brazil's Marfrig Global Foods SA.
It has a joint venture in Europe called Invicta Food and controls a distribution unit named Universal Meats.
The company said it will focus its operations from now on in the Brazilian domestic market, Asia and Muslim market, "in this last case assisted by exclusive plants, which includes Banvit's assets, in Turkey." ■