BNDES to consider selling $1.2bn stake in Brazilian meat firm JBS

Brazilian development bank BNDES is reportedly in discussions with other banks to sell its stake worth R$5 billion ($1.2 billion) in the meat processing company JBS, also based in Brazil.

Sources with knowledge of the matter said that proposals for the sale are expected to be delivered in the next few days.

BNDES’ investment unit BNDESPar holds a 21.3% stake in the JBS and is allegedly planning to sell only part of its stake in the company.

BNDESPar is required to keep a minimum stake of 15% in JBS to remain a part of the meat company’s board and have a veto on certain issues. If it elects to remain on the board, it will only be able to divest a 6.3% stake in the company, equivalent to 172 million shares.

It is unclear whether BNDESPar intends to completely divest its stake or maintain at least 15% in JBS. The appointed financial institutions will advise BNDES on the best time to make an offer in the market.

Another source familiar with the situation revealed that the shareholders agreement will expire on 31 December this year and it is not expected to be renewed.

Currently, BNDES’ total stake in JBS is worth around R$16bn ($3.8bn) and the sale would be its first in ‘national champions’ companies.

Neither BNDES and JBS have commented on the matter.