Brazil's BRF launches share offering, opening room for Saudi investment
SAO PAULO, July 4 (Reuters) - Brazilian food processor BRF said on Tuesday it has filed for a follow-on share offering that will allow a previously announced investment by Saudi Arabia's SALIC in the company to materialize.
BRF said in a securities filing it will initially sell 500 million new shares in a bid to raise money to reinforce its capital structure, particularly aiming to lower its net debt as it grapples with high financial leverage.
SALIC, Saudi Arabia's agricultural and livestock investment firm, had said in May it was committed to subscribing up to 50% of a potential offering by BRF as long as it was priced at no more than 9.00 reais per share.
The move was seen as strategic for Saudi Arabia, a major buyer of Brazilian meat products. The Saudi government, through the Public Investment Fund (PIF) which owns SALIC, had previously partnered with BRF for a halal meat joint venture.
Marfrig, the Brazilian meatpacker that controls BRF with a 33% stake, pledged to buy the remaining 250 million shares to be sold.
BRF said on Tuesday that the offering, which is set to be priced on July 13, may still be increased by 20% - which would represent an additional sale of 100 million shares - if demand allows it.
Considering BRF's June 30 closing price of 8.91 reais, the offering would total 5.35 billion reais ($1.11 billion) if the overallotment is fully sold, the company added.
JPMorgan, Bradesco BBI, BTG Pactual, Citi, Itau BBA, Banco Safra, UBS BB and XP Investimentos are managing it. ($1 = 4.8074 reais) (Reporting by Gabriel Araujo, Editing by Louise Heavens)
