Brazil's JBS S.A. announces it has submitted an asset divestment program

Brazil's JBS S.A. announced on Tuesday it has submitted an asset divestment program to its board of directors, in which it plans to sell Moy Park, Five Rivers Cattle Feeding and a 19.2 percent stake in Brazilian dairy company Vigor Alimentos to raise BRL6 billion ($1.82 billion). “The divestment program will reduce the company's net debt and, consequently, its financial leverage, strengthening JBS' financial structure,” the company said in a statement to investors. The world's largest beef processor added that its divestment plan considers “non-core and less strategic assets.” The $1.82 billion that JBS plans to raise by selling the assets would be in addition to $300 million from the sale of the company's beef operations in Argentina, Paraguay and Uruguay to Minerva, announced on June 6. The divestment plan still has to be approved by the board and by shareholder BNDESPar, the investment arm of Brazil's national economic development bank BNDES. The holding company controlling JBS, J&F, signed a leniency agreement on June 5 to pay a BRL10.3 billion ($3.3 billion) fine to settle charges related to corruption and payment of bribes by its controlling shareholders to Brazilian politicians. Since then, the company's controllers have been looking for ways to raise funds in order to reduce the group's debt. JBS bought Irish poultry producer Moy Park from Marfrig Global Foods in June 2015 for $1.5 billion, as part of JBS' plans to expand business in Europe and improve geographic diversification. Five Rivers Cattle Feeding is a wholly-owned subsidiary of JBS, with combined feeding capacity of more than 980,000 head of cattle, and farms located in Colorado, Kansas, Oklahoma, Texas, Arizona, and Idaho. The company also manages a 75,000 head capacity feed yard in Canada, according to information on its website. Vigor Alimentos is one of Brazil's largest dairy companies, controlled by J&F.