BNDES rejects JBS operation

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The BNDES – the Brazilian National Bank for Social and Economic Development – surprised many market’s participants by rejecting, on October 26th, 2016, JBS’s restructuring proposal, through which up to 85% of the company’s capital would leave the Brazilian market to be listed abroad. As a member of its controlling group, BNDS claimed, in a notice to the market, that “the proposed restructuring, which contemplated the transfer of the ownership of assets representing approximately 85% of JBS’ operating cash generation to a foreign company, would lead to the denationalization of the company and bring significantly changes to the rights and duties of all shareholders, with several kinds of consequences, subjecting them to the foreign law and jurisdiction.”
The decision was celebrated by Amec. “Our members have been criticizing the transaction since its announcement because of the several aspects it represented – primarily the lack of a public offer and the non-equitable treatment to minority shareholders in the migration to the new company as they, unlike controlling shareholders, would be subject to an apportionment as part of the migration,” explains Mauro Rodrigues da Cunha, Amec CEO.
With this decision, the BNDES breaks with the tradition of agreeing with the moves of the large “national champions,” defending its equity, social function and its role as a partner of the capital market.
Click here to access the Material Fact published by JBS and here to access the Notice to the Market published by BNDES.