In this file:


·         JBS recovered R $ 7 billion in market value [With Google Translate]

The price was the highest ever since May 19, when it stood at R $ 8.71, which already brings JBS closer to the value before the Batista brothers' ...


·         JBS Improving Its Governance and Cash Position While Brazil’s SEC Opens Case

… JBS is facing numerous issues it needs to manage concurrently to maintain its position as the largest meatpacker globally…



JBS recovered R $ 7 billion in market value

The price was the highest ever since May 19, when it stood at R $ 8.71, which already brings JBS closer to the value before the Batista brothers' ...


PorkWorld (Brazil)

August 9, 2017


With Google Translate


JBS shares rose sharply yesterday at B3, completing five consecutive trading sessions on the upside. The shares closed the session at R $ 8.55, up 7.55%, the highest among the Ibovespa shares. In addition, the quotation was the highest ever since May 19, when it stood at R $ 8.71, which already brings JBS closer to the Batista brothers' pre-delinquency value. With yesterday's high, which made the meat market's market value rise from R $ 21.7 billion on Monday to R $ 23.3 billion, JBS shares surpassed R $ 8.00 per First time since May 31. Thus, JBS has already recovered R $ 7.013 billion in market value since its worst moment, on May 22, the first week after the Batista brothers' disclosure. In that trading session, the company's stock reached a minimum of R $ 5.98, and the market value dropped to R $ 16.318 billion.


In any case, JBS's shares are still below the price seen on May 17, the last trading day before the announcement of the sale. At the time, the company's market value was R $ 25.921 billion. Among the factors contributing to the recovery of JBS shares is the agreement signed in July with banks in Brazil to renegotiate the company's short-term debt. In the operational area, the company is normalizing the slaughterings. In addition, JBS follows its divestment plan with which it intends to obtain R $ 6 billion and thus reduce its debt. Last week, J & F Investimentos, the holding company of the Batista family that controls JBS, announced the sale of Vigor to Mexico's Lala. Owner of 19.43% of the dairy company, JBS will receive R $ 780 million. In addition, JBS concluded last week the sale of refrigerators it had in Mercosur to Minerva, for US $ 300 million. Other businesses, such as Irish subsidiary Moy Park and the American Five Rivers, are still on sale.


Last Monday, at an event in São Paulo, the president of the National Bank for Economic and Social Development (BNDES), Paulo Rabello de Castro, also signaled that a gradual change could occur at JBS, with the departure of entrepreneur Wesley Batista from the CEO position. The state-owned bank holds 21% of the capital of JBS, through BNDESPar. Using a football metaphor, the BNDES official stated that Wesley Batista scored goals as CEO, but that "a good player can change at least a position. That is our tendency."


Source: Value


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JBS Improving Its Governance and Cash Position While Brazil’s SEC Opens Case


By Gabriel Thoumi, CFA, FRM, ValueWalk

August 9, 2017


As written by Chain Reaction Research, last week, JBS appointed Alfred “Al” Almanza as Global Head of Food Safety and Quality Assurance, reporting directly to JBS Global President of Operations Gilberto Tomazoni. From 2014 to 2016, Almanza was Deputy Undersecretary at U.S. Department of Agriculture Food Safety and Inspection Service under Secretary Tom Vilsack.


Almanza has a 40-year career as an expert on the food safety, risk management, the development of modern inspection systems and international sanitary systems and standards that enable market access for meat and poultry products. As Dallas District Office manager, he led a team of more than 7,000 FSIS field employees.


Almanza’s focus at JBS will be to enable JBS global operations to achieve and implement the highest food safety and quality control and risk management systems globally, to maintain and grow their export presence globally.


Almanza has a lot of work ahead of him.


JBS is facing numerous issues it needs to manage concurrently to maintain its position as the largest meatpacker globally.


·         On March 17, 2017, Brazilian federal police served court orders, warrants, and detention requests to JBS and BRF for allegedly bribing meat inspectors.

·         On March 21, 2017, Brazil’s environmental protection agency, IBAMA alleged JBS knowingly bought cattle that were raised on 200 square miles of illegally deforested land.

·         On May 12, 2017, the Brazilian Federal Audit Court (TCU) released an audit of alleged fraudinto Brazilian Development Bank (BNDES) loans used by JBS to finance its 2007 Swift & Company acquisition.

·         On May 26, 2017, JBS Chairman of the Board Joesley Batista resigned. Tarek Farahat was named the new JBS Chairman of the Board.

·         On May 31, J&F Investimentos agreed to pay USD 3.2 billion over 25-years following testimony by J&F owners Joesley and Wesley Batista that they spent about USD 185 million over several years to bribe nearly 1,900 politicians. The Batista family, via the holding company FB Participações, is the controlling shareholder of JBS. They own 42.3 percent while BNDES owns 21.3 percent.

·         On June 6, 2017, The Guardian reported that JBS allegedly paid about USD 3 million from 2013 to 2016 for cattle sourced from a farm in the state of Pará where Brazilian prosecutors in June 2016 uncovered laborers forced to work under inhumane and degrading conditions. The farm owner had also previously been fined USD 36 million for illegally deforesting an area of 33,000 hectares from 2012 to 2015.

·         On July 19, the Securities and Exchange Commission of Brazil (CVM) stated it had opened two probes into foreign exchange transactions by J&F Investimentos. It also stated that it was conducting 12 other investigations into alleged corporate wrong-doing by J&F controlled companies, including allegations of insider trading.

·         On August 3, President Temer barely survived a vote by the Brazil’s lower house of Congress 263 to 227 that would have given the okay for his prosecution for allegations that he received millions of dollars in bribes from JBS.


As a result, JBS USD one billion IPO scheduled for H1 2017 was delayed and JBS financial position has weakened. The Batistas have sold other assets to ensure financial stability for JBS and to pay for their legal settlements after they confessed to corporate crimes used to grow JBS globally, generating possibly over USD five billion from these sales.


·         On July 13, J&F Investimentos sold their 86 percent position in Alpargatas SA for USD 1.1 billion.

·         On July 25, JBS announced that its banks will allow it to roll over 90 percent of its USD 6.5 billion in notional debt for the next 12 months in exchange for amortizing 10 percent of this debt in four installments over the next 270 days. JBS also committed to apply 80 percent of its assets sales’ net proceeds to amortize debt.

·         On July 31, Minerva completed its USD 300 million purchase of JBS Paraguay, Frigorico Caneloness, JBS Argentina, and Industria Paraguaya Frigorifica pursuant to the share purchase and sale agreement executed on June 5, 2017 with JBS.

·         On August 2, JBS listed Pilgrim’s Pride reported stronger Q2 2017 earnings than expected. They reported adjust EBITDA 49 percent up year-over-year.

·         On August 4, J&F Investimentos agreed to sell Vigor Alimentos – its cheese and yogurt business – to Mexico’s Grupo Lala SAB. The deal is worth USD 1.8 billion. This sale has an exit multiple of 17.4X EV/EBITDA, which is very high. Lala entered into an agreement to buy 91.99 percent of Vigor from FB Participações and JBS. JBS had a 19 percent ownership position in Vigor.


Bloomberg reported August 4, 2017 (paywall):