February 3, 2022

BRF raises US$1 billion in its biggest share offering this year

Major meatpacker BRF SA has raised BRL 5.4 billion (~US$1 billion; BRL 1 = US$0.19) in Brazil's biggest share offering of 2022 as it looks to cut its debts, Bloomberg reported.

The biggest chicken exporter in the country sold 270 million shares at BRL 20 (~US$3.80) each, a 7.5% discount compared to its closing price on February 1, 2022. BRF did not sell an additional allotment of up to 54 million new shares.

The company's shares dropped 9.8% on February 2, 2022.

Analysts have wondered whether competitor Marfrig Global Foods would potentially buy BRF following BRF's capital-raise plans that was announced in December 2021. Marfig's current stake in BRF is just above 30%, according to a person familiar with the matter. Marfrig declined to comment.

The sale will allow BRF to push forward its its deleveraging plans as its net debt-to-Ebitda ratio rose 5.5% in the third quarter from a year earlier, to around three times.

BRF said in December that increased costs will postpone its earnings goal by a year.

The BRF transaction was led by Citigroup Inc. Other buyers include while Banco BTG Pactual SA, Banco Itau BBA, Morgan Stanley, Banco Bradesco BBI, JPMorgan Chase & Co., Credit Suisse Group AG, UBS BB Investment Bank, Banco Santander Brasil SA, Banco Safra SA and Bank of America Corp.

-      Bloomberg