BRAZIL, São Paulo. BNDESPar, the equity arm of Brazil's state lender BNDES, vetoed a proposed reorganization of meatpacking company JBS claiming "it is not in the best interest of the company and its shareholders," according to Reuters.
BNDESPar said the reorganization would transfer about 85% of the company's cash generating capability to a foreign entity, "substantially altering the rights and duties of all of the company's shareholders."The veto sent shares of the world's biggest beef exporter tumbling as it dealt a blow to plans to become a global food processing powerhouse headquartered in Ireland.
BNDESPar, which owns 20.36 of JBS's capital stock, started to invest in the company in 2007. As a party to the company's shareholder agreement, BNDESPar has veto rights over corporate reorganizations, the statement said.
JBS shares plunged nearly 18, the most in eight years, indicating frustration with the end of a plan aimed at accelerating growth, reducing fundraising costs, optimizing taxes and attracting a wider investor base.