January 16, 2020 / 10:42 AM / 2 days ago

Market reacts positively to Brazil beefpacker Minerva's $327 million share offering

SAO PAULO (Reuters) - Brazilian beefpacker Minerva SA (BEEF3.SA) announced a share offering on Thursday that could raise as much as 1.368 billion reais ($327 million), sending the company’s shares up on expectations that it will improve the company’s debt profile.

Minerva said in a filing that it plans to sell 80 million new shares in the offering, with proceeds earmarked to pay certain debt obligations. Another 15 million existing shares owned by VDQ Holdings, which currently has a 29.16% stake in the meatpacker, are also going to be sold as part of the transaction.

Minerva shares erased earlier losses and were up 4.5% in early afternoon trading in Sao Paulo, at 15.05 reais. Credit research firm Lucror Analytics upgraded Minerva bonds to ‘buy’ from ‘hold’.

Lucror’s Soummo Mukherjee said in a report to clients he expects the company’s net debt to drop by 22% and its debt rating to improve.

The share offering will be priced on Jan. 23, the company said.

Brazilian meatpackers are benefiting from a surge in meat exports to China after the outbreak of a deadly pig disease in the Asian country.

Minerva is a leading beef producer and exporter in South America, selling chilled, frozen and processed meats. It also exports live cattle. Its shares are up 17.2% this year.

According to its website, Minerva operates 25 cattle-slaughtering plants in Brazil, Paraguay, Uruguay, Argentina and Colombia, with a total daily capacity of 26,380 head of cattle.

Reporting by Ana Mano; Editing by Bernadette Baum and Rosalba O'Brien

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