Brazilian meat processor JBS SA's board of directors approved last month for the company to obtain up to BRL1 billion ($493.15 million) in financing from state-run bank Caixa Economica Federal, a potential credit line the company said routine, and not to fund a specific acquisition.
The approval became public this week in board meeting minutes, Jerry O'Callaghan, JBS investor relations director, told Meatingplace. It's considered a regular part of credit limit tapping with lending institutions that the board routinely authorizes, O'Callaghan said.
How the funds may be used in the future hasn't been decided, said O'Callaghan, noting the additional credit may be part of the company's routine and mandatory process of having enough cash on hand to meet debt obligations at any point for the following 12 months.
JBS President Wesley Batista said in May that the company would initiate sometime this year negotiations to acquire the Frangosul assets in southern Brazil of faltering French poultry company Doux. Those assets, which JBS began leasing from Doux on May 23, carry outstanding debt of around BRL1 billion.
O'Callaghan, however, said the approval for BRL1 billion in new financing has no relation to funding a future acquisition from Doux.
Source: Argentine Beef Packers S.A.
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