Brazilian food processor BRF has announced the launch of a share offering, which will also open the door for an investment from Saudi Arabia. BRF aims to raise funds to strengthen its capital structure and reduce its net debt.
The company plans to initially sell 500 million new shares. In May, Saudi Arabia’s agricultural and livestock investment firm, SALIC, expressed its commitment to subscribe to up to 50% of the offering as long as the share price does not exceed 9.00 reais. This investment is strategic for Saudi Arabia, a significant buyer of Brazilian meat products. The Saudi government, through the Public Investment Fund, had previously partnered with BRF for a halal meat joint venture.
Marfrig, the Brazilian meatpacker that controls BRF with a 33% stake, has pledged to purchase the remaining 250 million shares to be sold.
BRF has stated that the offering may be increased by 20%, which would mean an additional sale of 100 million shares, depending on demand. If fully sold, the offering could amount to 5.35 billion reais ($1.11 billion) based on BRF’s closing price on June 30.
The offering is set to be priced on July 13, with JPMorgan, Bradesco BBI, BTG Pactual, Citi, Itau BBA, Banco Safra, UBS BB, and XP Investimentos serving as managers.
This move marks an important step for BRF as it seeks to address its financial leverage and strengthen its position in the market. With the participation of Saudi Arabia’s SALIC and support from Marfrig, BRF is well-positioned to make significant progress in its capital structure and reduce its debt.
The outcome of this share offering will provide further insight into the interest and confidence of investors in BRF and its future prospects. As Brazil’s largest poultry exporter and a key player in the global food industry, BRF’s success is of great importance to both the Brazilian and Saudi Arabian markets.
By reinforcing its capital structure and lowering its net debt, BRF aims to enhance its financial stability and improve its ability to seize opportunities for growth in the dynamic and competitive food processing sector. The Saudi Arabian investment further strengthens BRF’s strategic partnerships and opens doors to potentially lucrative markets.
With the offering set to be priced soon, stakeholders and investors are eagerly awaiting the results and the impact they will have on BRF’s future trajectory.
