Poultry Giant BRF Raises $1 Billion in Brazil’s Biggest Share Offering of 2022

(Bloomberg) -- Brazilian meatpacker BRF SA has raised 5.4 billion reais ($1 billion) in the country's biggest share offering so far this year, speeding up its plan to cut debt.

The world's largest chicken exporter sold 270 million new shares at 20 reais apiece, a 7.5% discount to Tuesday's closing price, the company said in a regulatory filing, confirming an earlier Bloomberg News report. The company opted not to sell an additional allotment of up to 54 million new shares.

Shares of BRF fell as much as 9.8% in Sao Paulo Wednesday, leading losses on the Ibovespa index at 10:30 a.m. local time.

As soon as BRF's capital-raise plans were announced last December, analysts started wondering whether rival meat producer Marfrig Global Foods would be a potential buyer. Marfrig bought enough shares to keep its stake in BRF at little over 30%, according to a person familiar with the matter, asking not to be identified discussing confidential information. Marfrig declined to comment.

The sale will allow BRF to accelerate its deleveraging plans. The company's net debt-to-Ebitda ratio rose 5.5% in the third quarter from a year earlier, to around 3 times. Last December, the chicken producer said rising costs will likely delay its earnings goal by a year.

The transaction plowed ahead even as bankers predict a drop in Brazil's share offering activity this year, as higher interest rates and election uncertainty take a toll on investor appetite. Last week, a billion-dollar offering of Braskem SA shares was pulled, with selling holders mentioning “inadequate” demand and price levels.

Citigroup Inc. led the BRF transaction, while Banco BTG Pactual SA, Banco Itau BBA, Morgan Stanley, Banco Bradesco BBI, JPMorgan Chase & Co., Credit Suisse Group AG, UBS BB Investment Bank, Banco Santander Brasil SA, Banco Safra SA and Bank of America Corp. also helped on the sale.