Top poultry exporter BRF sees US$1.5b halal unit IPO by late March: sources

[SAO PAULO] Brazilian food exporter BRF SA is seeking to raise about US$1.5 billion from the sale of a 20 per cent stake of a unit focused on the halal processed food market via an initial public offering, two people with direct knowledge of the plan said on Thursday.

São Paulo-based BRF, the world's No 1 poultry exporter, expects to price the One Foods Holdings Ltd's IPO by late March or early April, depending on market conditions, said the people.

London is likely to be picked as the listing place, they said.

Proceeds from the IPO could be used to help propel the expansion of One Foods into Asian Muslim nations. The company already controls 45 per cent of the poultry market in Saudi Arabia, the United Arab Emirates, Kuwait, Qatar and Oman.

The operations of One Foods were formally launched on Wednesday, underscoring BRF's wish to expand in the buoyant market independently from other regions.

The halal meat industry market, which complies with Muslim dietary rules, could grow to US$60 billion by the end of the decade.

BRF has hired the investment-banking units of Bank of America Corp and Morgan Stanley & Co to underwrite the One Foods IPO, with Citigroup Inc acting as an advisor to the process, the people said.

The companies declined to comment.

Both BRF and the banks dropped the idea of a listing in the United Arab Emirates, where One Foods is based, the people said. Currently, One Foods operates ten plants, of which eight are in Brazil, and has 15,000 employees.

According to the first person, BRF estimates One Foods to have an enterprise value close to US$6.5 billion. Enterprise value is a widely used gauge of a company's total value comprising market capitalisation, debt, minority interest and cash.

REUTERS