Brazil's JBS gets needed consents for 9 3/8%, 10½% notes

By Jennifer Chiou

New York, Aug. 14 - JBS SA and JBS Finance Ltd. announced the receipt of the necessary consents to amend its $275 million of 9 3/8% senior notes due 2011 and $300 million of 10½% senior notes due 2016.

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

The company said it received consents from holders representing a majority of the 9 3/8% notes and more than two-thirds of the 10½% notes, adding that it will execute the related supplemental indentures.

The company was seeking amendments to the note indentures to (1) enhance its ability to reallocate its debt structure 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 to reduce its overall debt service costs.

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

Holders who delivered 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.

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 was D.F. King & Co., Inc. (call collect 212 269-5550 or 800 207-3158). The solicitation agents were 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-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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