Sao Paulo -- JBS SA has received permission from a Brazilian appeals court to sell assets as the world’s largest meatpacker copes with fallout from a corruption scandal involving the family that controls it.
Also read, Countries raise inspection bar for meat imported from Brazil.
In a statement on Thursday, JBS said it had learned that Brazil’s Regional Federal Court of the 1st Region overturned a ruling blocking the US$300 million sale of a South American unit to rival Minerva SA. Newspaper O Estado de S. Paulo reported the news earlier in the day.
The regional court also removed any lingering restrictions on JBS to negotiate sales of any assets or operations. On June 21, federal Judge Ricardo Leite had blocked JBS’s sale of plants in Argentina, Paraguay and Uruguay, saying it could harm a probe against the billionaire Batista family.
Efforts to obtain the ruling from the court’s media office were not immediately successful.
With permission to sell assets, JBS has gained flexibility to downsize amid talks to restructure 18 billion reais (C$7.1 billion) in looming loan maturities, which Reuters reported last month. Asset sales could make up for smaller access to credit from state lenders after the scandal involving brothers Wesley and Joesley Batista.
Cheap state loans helped fuel growth over the past decade at J+F Investimentos SA, the Batistas’ holding company, which was able to keep control of JBS while expanding into fashion, pulpmaking and banking. Through takeovers, JBS grew from a mid-sized slaughterhouse in Brazil’s Midwest into the world’s No. 2 food processor in that time.
Wesley Batista, the older brother, is chief executive officer of Sao Paulo-based JBS. State development bank BNDES, whose investment arm is JBS’s No. 2 shareholder, is demanding his removal.
In May, Prosecutor-General Rodigo Janot reached a plea deal with both brothers, who agreed to turn in 1,893 politicians they bribed.
Leite sits on the court that will also review a separate leniency deal that the Batistas reached with prosecutors over their participation in a bribery and graft scheme. The agreement requires the family to pay a record 10.3 billion-real (C$4.1 billion) fine over 25 years.
The Batistas have been selling assets to help raise cash to reduce a heavy debt load and pay the fine.
J+F sold control of the globally popular Havaianas flip-flop brand maker Alpargatas SA to the investment firms of Brazil’s most prominent banking families for 3.5 billion reais late on Wednesday.
SOURCE Guillermo Parra-Bernal, Reuters
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