By Lise Alves, Senior Contributing Reporter
SÃO PAULO, BRAZIL – The world’s largest meat processor, Brazilian company JBS, announced on Tuesday a divestment program that it hopes will render R$6 billion. In addition to selling its participation in one of the largest dairy product firms in Brazil it will also sell its participation in a food processing subsidiary in Northern Ireland and in a livestock confinement business in the United States.
The divestment program will reduce the company’s net debt and, consequently, its financial leverage, strengthening JBS’ financial structure,” said the statement issued by JBS to its investors on June 20th.
According to the company assets involved in the divestment program include the sale of 19.2 percent participation in Brazil’s Vigor Alimentos S.A., the sale of its participation in Ireland’s poultry processing giant Moy Park, and the sale of Five Rivers Cattle Feeding assets and farms with operations in the United States and Canada.
The decision to sell some of its assets comes less than two weeks after the meatpacking giant announced it was selling its subsidiaries in Argentina, Paraguay and Uruguay for US$300 million.
Caught up in Operação Lava Jato (Operation Car Wash), one of the largest corruption scandals in Brazilian history, JBS’ former CEO, Joesley Batista, made a deal last month with federal prosecutors to disclose illicit payments made to high-level politicians and executives to obtain benefits in the Brazilian Congress and in the country’s government funded development bank, BNDES.
Due to the plea-bargaining agreement made by Batista, J&F in Brazil, controller of meatpacking giant JBS, agreed to pay R$10.3 billion over the next 25 years. According to prosecutors, the fine is the largest to be paid for corruption in the world.