SAO PAULO, Aug 23 (Reuters) – Brazil’s JBS SA,
the world’s largest meatpacker, said it is considering suing
U.S. investment firm OppenheimerFunds for spreading potentially
libelous information about its leasing of a local poultry plant
owned by France’s Doux.
In a statement released on Friday, JBS said its leasing of
Doux’s Frangosul assets in Brazil in May 2012 does not violate
any claims OppenheimerFunds might have on Doux’s assets as
collateral for unpaid debts. JBS, which did not specify where it
would file a lawsuit, denied having bought the Doux assets.
Art Steinmetz, president and chief investment officer of
OppenheimerFunds, told Bloomberg News on Thursday that JBS’s
lease of the Frangosul plant violates the fund’s rights over the
unit, which was put up as collateral on a $100 million defaulted
loan. He said the fact that JBS is 30-percent owned by Brazilian
federal government entities could spell a potential risk for the
fund’s rights as a creditor.
JBS said in its statement that no state entity actively
participates in the company’s management and strategy.
OppenheimerFunds Inc, a unit of Massachusetts Mutual Life
Insurance Co, said it will respond later to a request for
comment on the JBS statement.
The issue underscores mounting worries among bond investors
in Brazil who are grappling with the impact of a slowing
economy, rising state intervention in the economy and rising
legal uncertainty in the country.
“As was widely conveyed to the market, JBS did not acquire
Frangosul from Doux. The company (JBS) leased the installations
that by other means may be seized by creditors in a long legal
battle,” the statement said. “With the leasing … JBS avoided
thousands of people being fired and an unprecedented economic
impact hurting the region.”
The plant is in the southernmost state of Rio Grande do Sul.
JBS can renew the 10-year lease, which also gives it the
option to buy the local unit of the French poultry company.
Brazil’s BNDES state development bank holds a 19.85 percent
equity stake in JBS, similar to stakes it holds in most of
Brazil’s big meat producers such as BRF Brasil Foods SA
, Marfrig and Minerva Foods.
The government-controlled Caixa Economica Federal bank holds an
additional 10 percent stake in the company.
The New York-based fund is free to take any action under the
law to recover its debts from Doux, JBS said, adding that the
leasing of Frangosul by JBS “does not circumvent or jeopardize
in any way Oppenheimer’s options to exercise its rights.”
“Therefore, any attempt on Oppenheimer’s part to make JBS
responsible for debts assumed by Doux Frangosul shows a profound
lack of understanding in the basic principals of law and
characterizes a gross distortion of the facts, which JBS will
vigorously contest,” the company said.
