Read this Thursday’s edition of the FolhaMercado newsletter (1st) – 06/01/2023 – Market

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BRF breathes with an offer of up to R$ 4.5 billion

BRF shares closed the day at a high of 11% after the company informed the market that its parent company Marfrig and the Saudi fund Salic committed to a capital increase of up to BRL 4.5 billion in company.

• The maximum price for issuing shares is BRL 9which includes a premium of almost 24% at the closing price of Tuesday (30).

• This Wednesday, the papers closed the BRL 8.13.

Which explains: the announcement was well received by the market at a time of difficulty for BRF due to its high debt.

According to calculations by Bradesco BBI, the capital contribution would reduce the ratio between net debt/Ebitda (an indicator that measures how much the debt exceeds the cash generation) of the current 3.3 for 2.4 times.

Who is who:

BRF: largest chicken meat processor in Brazil, the owner of the brands Sadia and Perdigão accumulates a drop of almost 46% on the Stock Exchange in 12 months.

• At the end of February, it communicated to the market that it had hired Santander to advise on the sale of its pet food division.

Salic: sovereign fund of Saudi Arabia, a country that is one of the biggest importers of Brazilian chicken meat.

• It is already Minerva’s largest shareholder, with a 30% stake in the beef producer, and will own 15.7% of BRF if the offer goes ahead.

Marfrig: controlled by businessman Marcos Molina, the 2nd largest producer of beef in the world will be able to expand to 38.3% its current stake in BRF, of 33%.

• For this, a shareholders’ meeting will have to approve the exclusion of a clause (called the “poison pill”) that prevents a shareholder from owning more than 33% of the shares.

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Car sales slow down waiting for details from the government

Amid the wait for details of the government’s incentive plan for popular cars, the sale of new vehicles has fallen by around 30% in recent days, show market data obtained by Sheet.

In numbers: From April 25th to 30th, were licensed 47,815 vehicles in the country, while from the 25th to the 30th of May the total was 33,417. The account includes other categories, such as trucks and buses, but most licenses were for passenger cars.

Which explains: consumers are waiting to find out how and how much new car discounts will be before closing a purchase that was already advanced, according to reports from dealership managers made to the Sheet.

In the announcement of the plan, last week, the government promised the details of the measure within 15 days.

What is known so far: reductions in the final prices of vehicles of up to R$ 120,000 will vary from 1.5% to 10.96% —the cheaper, the bigger the discount.

• In addition to price, two other factors will be taken into account to determine the size of the tax cut: energy efficiency and national production.

In an interview with Sheetthe secretary responsible for designing the plan says that the government is preparing to announce various structural measures to encourage industry, and that the project to encourage popular and green cars was never discussed.

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Latam sues Hurb in court

Latam suspended the issuance of tickets purchased by Hurb and filed a lawsuit against the travel platform to collect debt from BRL 10.78 million.

• The airline said travel scheduled with tickets already issued by Hurb will be honored.

The process: Latam claims that the platform did not settle four purchases made between March and April, the last of which expired on April 10.

• Adding fines and fees, the disputed amount rises to R$ 13.61 million, the company told the court.

Hurb says which has not yet been notified by official means and, for legal reasons, does not comment on the action. The platform also said it was available to the authorities for clarification.

This is yet another problem to be faced by the Hurb. The platform has been going through a crisis since the beginning of the year, when reports emerged that it was not honoring airline tickets and accommodation reservations purchased through its flexible packages.

• The modality in which customers only determine the destination, without defining the date of travel, is Hurb’s main source of revenue.

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The message from breweries to governments

The brewing industry, led by Ambev and Heineken, warned the federal and state governments that it will not withhold any tax increases to the sector and will pass on the increase to consumers, according to the column Panel SA

In numbers: the breweries, represented by Sindicerv, cite a study by FGV to show that, from 2019 to 2022, companies in the sector absorbed 52.8% of the increase in production costs.

• The pass-through to prices was, according to the entity, 14%.

The industry claims that the recent increase in production costs comes with packaging shortages and rising prices for malt and hops.

More about the industry

The Mexican FEMSA, the largest Coca-Cola bottler in the world and owner of the Oxxo supermarket chain, said on Tuesday (30) that it sold 3.3 billion euros (R$17.9 billion) in Heineken shares.

The slice represents 5.9% of the capital of the brewery and is part of the Mexican strategy announced at the beginning of the year to get rid of its entire stake in the Dutch company, of 15%, in up to three years.

A good part of the shares that belonged to FEMSA went to billionaire Bill Gates, who bought a slice of 3.76% of the Dutch brewery, according to a document released in February.