UPDATE 1-Brazil's Marfrig sells Argentine meatpacking units for $75 mln

miércoles 6 de abril de 2016 11:26 GYT
 

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BRASILIA/SAO PAULO, April 6 (Reuters) - Marfrig Global Foods SA has agreed to sell three meatpacking and a livestock confinement unit in Argentina to a subsidiary of China's Foresun Group for $75 million, in the latest asset sale by the debt-ridden Brazilian meatpacker.

Under terms of the accord, Black Bamboo Enterprises SA, which Foresun controls, will take over three meatpacking units that Marfrig had in the towns of Hughes, Vivoratá and Unquillo, the São Paulo-based company said in a securities filing on Wednesday. The confinement unit is based in the town of Monte Ralo.

According to the filing, Foresun's Black Bamboo agreed to pay $34 million in cash on Wednesday, with the remaining amount due over the next 12 months. Marfrig will continue to operate a meatpacking unit in the Argentine province of San Luis, the filing added.

Operations for beef exporters based in Argentina, and demand for related assets, have both improved since a business-friendly administration took office in December and rapidly lifted taxes and trade restrictions on the commodity. Some analysts expect incumbent producers and potential newcomers to enter the Argentine beef market, one of the world's most renowned but which, for years, lost global relevance due to the restrictions.

Shares of Marfrig gained 1.6 percent to 6.44 reais on Wednesday. The stock is up 53 percent in the past 12 months as chairman and controlling shareholder Marcos Molina stepped up asset sales outside Brazil to reduce debt.

Ciccra, as Argentina's meat industry and trade chamber is known, estimates beef exports to increase to 300,000 tonnes next year from 200,000 tonnes in 2015, while the Aacrea association of meat producers forecasts 350,000 tonnes. Agriculture consultancy group Tonelli & Associates put the figure at 400,000 tons. (Reporting by Silvio Cascione and Tatiana Bautzer; Editing by Guillermo Parra-Bernal, Chizu Nomiyama and Phil Berlowitz)