SAO PAULO (Reuters) - Brazilian food processor BRF SA has agreed to sell its units in Europe and Thailand to Tyson Foods, valuing them at $340 million, but postponed a debt reduction, according to a securities filing on Thursday.
BRF said it will take longer than expected to lower its debt to EBITDA ratio to 3 times, previously predicted for December 2019. Now it forecast it will meet this target by June 2020.
BRF, which will report earnings on Feb. 28, said it will present a debt to EBITDA ratio of 5 in the fourth quarter and 3.65 by the end of this year. Cash position should come in at 7 billion reais ($1.9 billion) in the fourth quarter.
The company also said it should raise 4.1 billion reais ($1.1 billion) with non-core asset sales, working capital and the securitization of receivables, less than a 5 billion reais target previously estimated.
The announcement underscores how the full turnaround in the world’s largest poultry exporter may take longer than expected. Poor results and a federal investigation into practices to evade safety checks led to a complete overhaul at BRF’s management.
As part of the turnaround, BRF had announced in June a large restructuring plan, which includes asset sales to reduce debt and adjustment in 22 of its 35 plants.
On Tuesday, BRF appointed former Petrobras Chief Executive Ivan Monteiro as its new chief financial officer, driving shares up.
($1 = 3.6982 reais)
Reporting by Carolina Mandl; editing by David Evans
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