April 4, 2018 / 11:51 AM / 22 days ago

Diniz to step down as chairman of Brazil's BRF - papers

SAO PAULO, April 4 (Reuters) - Businessman Abilio Diniz, chairman of embattled Brazilian food processor BRF SA , will resign from the post this week, local newspapers reported on Wednesday.

Under pressure from controlling shareholders after successive problems at the company, Diniz will present his resignation at an extraordinary board meeting scheduled for Thursday, the newspapers said, citing sources familiar with the plan.

The resignation is part of an agreement between Diniz and pension funds Previ and Petros, which control Brazil’s largest chicken processor through a combined 22 percent stake, the newspapers said.

Previ and Petros had requested the dissolution BRF’s board after the company posted a large loss in 2017 partly related to fallout from a food safety scandal, which also led to a temporary ban on its chicken exports to the European Union.

A dissolution of the board would likely lead to changes in the executive management of the company, whose shares have fallen by almost 37 percent so far this year, to 23.15 real ($6.93).

BRF declined to comment. Península Participações, Diniz’s family investment vehicle, did not have an immediate comment.

As part of the agreement with the funds, Luiz Fernando Furlan will take on the role of chairman until April 26, when a shareholders meeting will vote on new names to the board.

Diniz will also get to appoint two members to the board as part of the negotiated solution with the funds, the newspaper said. ($1 = 3.3409 reais) (Reporting by Ana Mano Editing by Frances Kerry)

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