Government support for Brazil’s meat industry, one of the world’s main exporters

Thursday, May 19th 2011 - 06:36 UTC

Full article 3 comments

The world’s largest beef producer, Brazil’s JBS announced its board agreed to boost its capital by as much as 3.48 billion Real (2.15 billion US dollars) through a private placement with Brazil’s state economic and social development bank. Read full article

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GeoffWard
Forgetit,
can you translate this Mercopress piece on JBS & BNDES, bonds & stock & compulsory (?) public offering. It makes little sense to me!
Who buys the stock? World public? BNDES? BNDES=Brasilian Government? Do stocks translate into a share of the company?

So much knowledge ;-) but none applicable to this case. Help needed.
G.
May 19th, 2011 - 08:04 pm - Link - Report abuse 0
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Forgetit87
http://economia.ig.com.br/empresas/comercioservicos/bndes+troca+divida+por+acoes+e+passsa+a+deter+31+do+jbs/n1596964624109.html
May 20th, 2011 - 06:00 am - Link - Report abuse 0
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GeoffWard
At the expense of other shareholders, Brazil's national development bank BNDES will increase its stake in JBS’s South American operations by converting a massive loan – debentures worth 3.48 billion reais - into equity, thus increasing its stake in JBS from 17% to 31%*.

The controlling Batista family will see its share in JBS drop from 55% to 47%. Batista said. “BNDES has a seat on our board, but it will not change its influence in JBS.”

*Thus, it seems to me, BNDS have swapped repayment of debt for buying into a major stake in the company and a permanent ‘doubling’ of returns from the profitability of the company’s South American operations. The state will then own 31% of the ‘private’ company.

I hope I have got this right.
May 20th, 2011 - 12:38 pm - Link - Report abuse 0
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