BRF has taken “preparatory measures” to explore the possibility of raising capital for OneFoods, the largest halal company in the world, through an initial public offering (IPO).
The meatpacker said it is considering raising capital by floating OneFoods Holding Ltd on the London Stock Exchange Market. A final decision has not been made concerning capitalisation as BRF is also exploring another option to raise money for One Foods: a private placement of OneFoods shares.
This would see BRF offer shares to a carefully selected small group of investors. Venture capitalists involved in private placements are usually large banks, insurance companies and pension funds.
News agency Reuters, citing two people with direct knowledge of BRF’s plan, said earlier in January that BRF is looking to raise around $1.5bn (£1.2bn) through an IPO by late March or early April. The report also suggested the meatpacker has hired investment firms Bank of America and Morgan Stanley to underwrite the One Foods IPO.
So far BRF has declined to comment on this, but on 8 November it said it had “formally engaged” investment banks to raise capital for its OneFoods subsidiary.
OneFoods has around 15,000 staff and runs nine slaughterhouses across Brazil and the United Arab Emirates. The business also operates grain storage facilitates, feed mills and chicken hatcheries and is operational in more than 40 countries.
IPO – at a glance
An initial public offering is the first time the stock of a private company is offered to the public. IPOs are often issued by young companies looking to raise capital for expansion, although established, privately owned firms may seek to go public too. Usually a company will seek the help of an underwriting firm, normally an investment bank, who will advise the best offering price.