JBS investors concerned about restructuring

Sao Paulo-A possible delay in the corporate restructuring of the JBS and the perception of obstacles in debt refinancing of the company are the main concerns of the market in relation to the JBS, after Greenfield operation, which investigates "reckless and fraudulent management" in State pension funds.
Although it doesn''t involve meat processor directly, the investigation has targeted the Eldorado cellulose, controlled by the same holding company, J&F.
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After the action of the company drop more than 10 percent in Monday''s trading and 1.7% yesterday, banks have downgraded the recommendation of JBS and warned about the possible risks involved.
As it was Broadcast yesterday, real-time information system of the State Group, the investigations raise fears about changes to the schedule of corporate restructuring and subsequent IPO of JBS Foods International on the New York Stock Exchange (Nyse).
This change was announced in may, right after the exit of Henrique Meirelles of the Chairman of the Advisory Board of J&F, to take over the Ministry of finance, in the same month, and was responsible for sustaining gains.
Delay in restructuring
Bradesco BBI''s report, signed by the Analyst Gabriel Lima, claims that there is a possibility of delay in the process of reorganization of the company.
It is expected that the new design was completed by the fourth quarter of this year, aiming to improve corporate governance.
"We accept that this is a red flag to many investors, but we believe the risk/reward is favourable". The analyst mentions that the reorganization will allow a reduction of financial costs and estimates that the discount rate applied to the cash flows JBS could drop significantly.
Also in the report, ITA BBA claims that the conduct of the case can change the schedule of corporate change. "We believe that the restructuring is an important trigger for the performance of the stock," he says.
JBS listing Foods International was what sustained the gains of shares recently, according to BTG Pactual. "We fear that this process could be delayed if list a general management review if necessary", says report.
In addition to restructuring, analysts cite the issue of indebtedness of the company.
Bradesco BBI says, in a report that the Federal Police action implies a perception of increased risk of debt refinancing of the company held by commercial banks-$ 18 billion of short-term debt to be renewed for the next 12 months.
JBS ended the second quarter with a net debt to 49.2 billion R$. Leverage stayed at 4.1 times the end of June, up from 3.84 times in the first quarter.
The percentage of short-term debt in total debt ratio stood at 32 percent in the period, of which 82% are lines pegged to exports of Brazilian units. At the end of the period, 91.4% of the debt denominated in dollars. The information is from the newspaper O Estado de s. Paulo.