Brasil Foods Advances Equity Offering

Brasil Foods, the new name for the merged Perdigao-Sadia, hopes to raise as much as BRL5.28bn through an offering of new primary shares, scheduled to be priced July 21. The company plans to issue 115m ordinary shares, with an additional 17m supplemental units, conditions permitting, according to a prospectus filed with the CVM. Using the July 7 closing price of BRL40.00 per share, the 115m shares could yield BRL4.6bn. Proceeds are largely being used to recapitalize the company and fix up its battered balance sheet, the Sadia part of which was damaged by BRL2.5bn worth of derivatives liabilities in 2008. Some 37% of proceeds will go towards paying down and raising FX export credit lines with commercial banks. UBS Pactual is leading the deal, with Banco do Brasil, JPMorgan and Santander as joint-leads.