Home Agribusiness Brazil’s JBS mulls delaying international unit IPO

Brazil’s JBS mulls delaying international unit IPO

General view of Brazilian meatpacker JBS SA in the city of Lapa, Parana state, Brazil, March 21, 2017. REUTERS/Ueslei Marcelino

JBS SA (JBSS3.SA), the world’s largest meat processor, may postpone the New York listing of a global food processing unit originally expected for the second quarter because of lukewarm investor feedback after a scandal in Brazil, two people with knowledge of the situation said.

Executives at São Paulo-based JBS were worried by the impact that the probe into alleged bribery of Brazilian health officials had on investors, the sources said.

The “Weak Flesh” probe named JBS alongside dozens of peers in a scheme that involved alleged payments to inspectors to overlook food safety procedures.

The investigation led to temporary bans on Brazilian meat exports by several countries. JBS has repeatedly denied any wrongdoing and insisted there that there was no problem with product quality.

The scandal broke weeks before JBS was due to launch the initial public offering of JBS Foods International BV, which could have raised about $1 billion and help accelerate expansion outside Brazil.

The IPO could be put on hold until the impact of the probe on JBS Foods International can be better gauged, the source said. JBS has kept Barclays Plc (BARC.L) as a leading underwriter for the transaction, the sources added.

The media office of JBS declined to comment.

The delay is another blow in JBS’s efforts to implement a reorganization plan aimed at transforming it into a global food processor. The JBS Foods International IPO plan was announced last December.

Previously, JBS was forced to scrap a plan to relocate international operations to Ireland after the investment arm of Brazil’s state development bank BNDES balked at it. Over two-thirds of JBS’ revenue come from operations outside Brazil.