Brazil's JBS starts consent solicitation for 9 3/8%, 10½% notes

By Jennifer Chiou

New York, Aug. 1 - JBS SA and JBS Finance Ltd. announced the launch of a consent solicitation for their $275 million of 9 3/8% senior notes due 2011 and $300 million of 10½% senior notes due 2016.

The company is seeking amendments to the note indentures in order to (1) enhance its ability to reallocate its debt structure in order to enable each distinct geographic operation to finance its own working capital needs, (2) reduce the need to engage in costly hedging transactions, (3) improve tax efficiency and (4) achieve a more efficient financing structure in order to reduce its overall debt service costs.

The company noted that it recently completed important acquisitions that have been funded primarily by large equity capital increases. JBS announced additional acquisitions that, if consummated, will further expand its operations.

As a result, JBS noted that it generates a substantial portion of its revenues and has a significant portion of its assets outside Brazil and has diversified its operations and revenues in an important manner.

JBS said it believes that the existing covenants in the indentures limit its ability to improve its operating efficiency, and consequently, its profitability.

The consent solicitation ends at 5 p.m. ET on Aug. 13. It began on Aug. 1.

Holders who deliver consents by the expiration date will receive $25.00 per $1,000 principal amount of 9 3/8% notes and $40.00 per $1,000 principal amount of 10½% notes.

The company is seeking consents of holders of at least 66 2/3% of both notes series.

On June 22, 2007, an ad hoc committee of holders of more than 51% of the notes said that it was opposed to the company's consent solicitation, which was linked to the acquisition of Swift Foods Co.

The information agent is D.F. King & Co., Inc. (call collect 212 269-5550 or 800 207-3158). The solicitation agents are ING Wholesale Banking (44 20 7767 5107), Santander Investment (212 407-0995) and UBS Investment Bank (888 719-4210 or call collect 203 719-4210).

Sao Paulo, Brazil-based JBS, also known as Grupo Friboi, is the fourth largest beef company in the world in terms of live cattle slaughtering capacity and the largest beef processor and exporter in Brazil and Latin America as measured by revenues.

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