Processing
JBS delays US unit going public 05 Feb 2010
JBS SA have delayed the US$2 billion initial public offering of its American unit amid market conditions that have deteriorated.
According to Bloomberg, JBS Chief Executive Officer Joesley Batista said the share sale won’t take place until after fourth-quarter earnings are released and may occur in the first half of the year if conditions improve.
“I think it is still possible to put it out in the first half of 2010,” Batista said. “But it really depends on market conditions that have recently deteriorated.”
Cash is being raised so that JBS can pay for its Pilgrim’s Pride Corp. acquisition and to fund a US$2 billion distribution network. According to analysts, JBS now controls about 10 percent of global beef processing following about 30 acquisitions since 1993.
The process for the sale of bonds and shares to raise the cash has been delayed, as Brazilian regulators have asked JBS to include the acquisitions of Pilgrim’s Pride and Bertin SA into its fourth-quarter earnings results.
In Sao Paulo trading, JBS stock rose 1.5 percent to 9.29 reais and has almost doubled in the past year.
According to Bloomberg, in a recent regulatory filing, JBS said that it is buying back $275 million of its 9.375 percent senior notes due in 2011.
The IPO delay comes after National Beef Inc which accounts for 14 percent of the US federally inspected steer and heifer slaughter postponed its initial share sale last month. The company cited the “weakness in the IPO market.”
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