August 8, 2016 / 12:55 PM / 4 years ago

UPDATE 3-Brazil's JBS shares rise as investors see progress in reorganization

(Recasts first paragraph, adds stock price, analyst comment)

SAO PAULO, Aug 8 (Reuters) - Brazil’s JBS SA, the world’s largest meatpacker, said on Monday it has begun to seek bondholders’ consent for its planned global reorganization plan intended to make it a global food player, and the company’s shares rose in trading in Sao Paulo.

Shares in JBS were up 4 percent in early afternoon trading, their largest rise this month, as investors saw progress in the reorganization.

Under the plan, a new Ireland-based company, JBS Foods International, will group the company’s operations and those of Brazil-based food processor Seara Alimentos.

JBS filed a request with the U.S. Securities and Exchange Commission on Friday for an ordinary share offering of up to $3 billion by the new Ireland-based company, JBS Foods International. Shareholders of JBS SA in Brazil and holders of JBS SA’s American Depositary Shares will automatically receive the new shares, according to the filing.

In a note to clients, Grupo BTG Pactual said the steps the company has taken indicate that the reorganization is underway, and poised to unlock value. “We continue seeing massive benefits for the stock from a valuation standpoint,” said analysts Thiago Duarte and Vito Ferreira in a note sent to clients on Monday.

The analysts forecast the stock can rise 44 percent, with a $16 target price.

According to the Monday securities filing, JBS USA Lux SA and JBS SA are asking bondholders of notes due in 2020 to 2025 to consent to the global reorganization proposed by JBS in May. The company will group international operations outside Brazil.

Bondholders are being asked to consent because some of the subsidiaries whose revenue guarantees the bonds will have new minority shareholders, one source with direct knowledge of the matter said.

Bondholders who agree to the reorganization from Monday through Aug. 16 will receive a $1.25 payment for each $1,000 in principal value of the notes, JBS said.

Reporting by Tatiana Bautzer and Paula Laier; Editing by Bernadette Baum and Will Dunham

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