Photographer: Victor Moriyama/Bloomberg

JBS Said to Delay New York Initial Offering After Meat Scandal

  • Company had expected international unit IPO in first half
  • Shares declined in March amid allegations over tained meat

JBS SA won’t complete an initial public offering of its international unit in New York in the first half of the year as originally planned, according to a person familiar with the situation, following a bumpy two months in which the company was engulfed in a food-safety scandal.

The world’s largest meat company is still considering when to go ahead with the IPO, said the person, who asked not to be identified because the deliberations are private. Sao Paulo-based JBS’s press office declined to comment on the offer.

The company unveiled its plan in December to list shares of JBS Foods International BV, a Netherlands subsidiary comprising all of its foreign assets plus a Brazilian processed-food unit. The move is seen giving JBS greater access to equity and debt markets while reducing capital costs. JBS said at the time it expected to complete the IPO in the first half of 2017.

In March, JBS shares tumbled in Sao Paulo after a scandal involving allegations of tainted meat and the bribery of government inspectors garnered international attention. Although JBS denied any wrongdoing amid the so-called Weak Flesh probe by federal authorities, Brazilian meat exports were temporarily blocked by several countries and production was disrupted.

The stock has partially recovered since then, but JBS has run out of time to meet the June 30 deadline. Even if it now decides to proceed with the IPO, it would take too long to comply with U.S. Securities and Exchange Commission requirements, the person said.

Last month, Joesley Batista was ordered by a judge to step down as chairman of J&F Investimentos SA, the Batista family holding company that controls JBS, amid an investigation into investments made by Brazilian pension funds. JBS, J&F and executives at the two entities have been mentioned in six different investigations since the end of 2015.

Before it's here, it's on the Bloomberg Terminal.