Ex-Petrobras CEO Picked to Turn Around Brazil Food Giant BRF
(Bloomberg) -- Pedro Parente was named chief executive officer at Brazil’s struggling food giant BRF SA amid hopes that the investor-loved executive will replicate the successful turnaround he implemented at state-controlled oil company Petrobras.
The 65-year-old executive will likely take over immediately after a government commission approved the appointment Thursday, soon after it was announced. The commission said the nomination faces no conflicts of interest in connection with his previous job. Parente will also continue as chairman of BRF for at least 180 days. As CEO, he will lead a reorganization process, name people for key positions and prepare a successor, BRF said in a statement.
Speculation that Parente would take over as BRF’s CEO grew in the last few weeks. The executive on June 1 resigned from the state-run oil producer in the aftermath of a truckers’ strike over the price of fuel that brought Brazil to a halt. The food company’s shares jumped earlier Thursday after people with direct knowledge of the matter said BRF directors were likely to choose him for the top job.
Parente had already given a boost to BRF when he was elected chairman in April, helping end months of fighting between major shareholders. The board will suggest changes to the company’s bylaws allowing the executive to accumulate both positions for as long as one year. A shareholders’ meeting will be convened to vote on the proposal.
As CEO, Parente will have to deal with debt levels that are among the highest in the industry after a string of losses, the fallout of a major food-safety scandal that wrought a ban by Europe and antidumping tariffs by China. The stock fell by almost 50 percent over the past year to the lowest level in almost a decade, and the company lost its investment-grade rating.
The job bears similarities to Parente’s task at Petrobras. He is credited with turning around the energy company at a time when it was shackled with debt, corruption and mismanagement. He was praised in financial markets for his plans to sell assets, reduce costs, recover cash flow and implement a new and profitable fuel price policy.
Parente, who was was previously a government minister and top manager at crop trader Bunge Ltd., is experienced in Brazil’s agriculture and food industry -- a skill that was missing among the previous top executives at BRF. The company has been looking for a new CEO since Jose Drummond Jr. quit in April after just four months on the job.
Interim CEO Lorival Nogueira Luz was named Chief Operating Officer.
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