Minerva Joins Brazilian Meat Giants Unable to Sell Shares Abroad
Minerva Joins Brazilian Meat Giants Unable to Sell Shares Abroad
(Bloomberg) -- Minerva SA’s decision to drop plans for an initial public offering in Chile marked the latest in a series of failed attempts by Brazilian meat companies to sell shares abroad over the past decade.
The Sao Paulo-based beef processor is withdrawing the planned Chilean market debut of unit Athena Foods amid financial and economic uncertainties in Argentina, which accounts for about a third of the unit’s revenue, a person with direct knowledge of the matter said.
All major Brazilian meat producers -- JBS SA, Marfrig Global Foods SA, BRF SA and Minerva -- have abandoned plans to sell stock in their subsidiaries outside of the country. Getting in their way were economic meltdowns and industry crises, including bribery and food-safety scandals.
JBS looks like being the next one to try, with a proposed U.S. share listing.
The planned $400 million IPO in Santiago was part of Minerva’s strategy to lower debt. Instead, the company is offering 80 million shares in Brazil, where it could raise about 1.15 billion reais ($274 million), based on Jan. 15 trading levels. On Thursday, its shares rose as much as 6.3% to 15.30 reais.
Athena -- which holds Minerva’s operations in Argentina, Chile, Colombia, Paraguay and Uruguay -- will continue as a Minerva subsidiary, the person said.
South America’s largest beef exporter first decided to delay the Chilean share sale in May as the trade war roiled markets. Since then, Argentina’s woes have deepened. Former President Mauricio Macri failed to revive the economy or defend the peso and the new administration of Alberto Fernandez is tightening capital controls and raising export taxes on farm products.
Argentina isn’t alone in spooking investors. In Chile, fallout from the biggest civil unrest since the return to democracy has made the country’s main equity index the worst performer among major Latin America markets in the past three months.
--With assistance from Vinícius Andrade, Eduardo Thomson and Gerson Freitas Jr..
To contact the reporter on this story: Tatiana Freitas in São Paulo at tfreitas4@bloomberg.net
To contact the editors responsible for this story: James Attwood at jattwood3@bloomberg.net, Patrick McKiernan
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