CCPR decides to investigate former management of Itambé

The current direction of the Itambé Foods hired KPMG to investigate what it considers "suspicions of mismanagement" in the dairy company, until December operated by Force, which was sold by the J&F to the Mexican Lala in August. The Force had 50% of Itambé and the remaining 50% belonged to the Central Cooperative of Farmers of Minas Gerais (CCPR).
The value found that KPMG report with initial observations of the audit-which is still "pending completion"-would strengthen the perception of current management, now in the hands of the CCPR.
The decision of the Board to call in an external audit is another chapter in the dispute that came to justice and put on opposite sides of the two companies, after the Itambé was sold to French for Lactalis, R $1.9 billion in December. In August 2017, the Force, who was from J&F, was acquired by Lala. The transaction involved still up 100% of the shares of Itambé, in which the Force was a partner with the CCPR.
The shareholders ' agreement provided for the right of first refusal to the CCPR repurchase the 50% slice of the Itambé who had alienated the Force in 2013, in case of sale of the latter. The CCPR has exercised the right and resumed control of the Itambé on December 4, but the next day announced the sale of the company for Lactalis.
A week later, the Force obtained an injunction on first Business and Stick to Arbitration Disputes in Sao Paulo, suspending the deal, claiming that the shareholders ' agreement was disobeyed. The CCPR appealed the suspension. The resource has not yet been tried, but justice kept the CCPR in charge of Itambé.
The Itambé confirmed the hiring of external audit, but didn't mention the subject. The Force did not comment.
Second found the value, there are three points in analysis by KPMG. One of them is the non-payment of dividends of the Itambé for partner CCPR in September 2017. The Board of Directors had approved in March last year the distribution of dividends in the amount of R $8.3 million for each partner, concerning the results of 2016. But only the Force received the amount in September. The CCPR only received after December 4, when he resumed control of the Itambé.
The non-payment of dividends on time would be, according to the prosecution, a way to "suffocate" the CCPR, forcing it to resort to banks, precisely in the month they announced that would wield the right to repurchase the other 50% of the Itambé. The decision of the CCPR to exercise preference surprised and displeased the Lala, second found the value, since it was interest of Mexican company have the assets of Itambé.
In your report on the initial observations of the audit to which the value had access, KPMG confirms that until 4 December, the CCPR had not received dividends of Itambé Foods.
Sources close to the Force stated that the CCPR did not receive dividends because about a year and a half had contracted a central R $18 million debt with the Itambé. Thus, the Board of Directors determined that the value of the dividend would be down that debt.
According to the story, it was the current management of the Itambé claims that Lala, who took over the force on October 26, "emptied" the register of the company. In October, the Lodge had some R $150 million in cash for working capital lines and billing. But on day 4 of December, when the CCPR resumed command, found some R $50 million in cash. According to the indictment, the manager would not have renewed lines of financing working capital with banks.
In his remarks, KPMG confirming having verified a reduction in liquidity indexes of Itambé, who had available R R $51.9 million $155.3 million in October and November.
Sources close to the Force said that the resources in the box of the Itambé decreased because in November won R $98 million in debt with four banks. The lines were not renewed, according to these sources, because banks were unsure about the new management of the Itambé.
Transactions involving sales of powdered milk to Venezuela closed agreements by JBS, another J&F's subsidiary, are also in the sights of the audit. In 2014, the company of the brothers Batista closed agreements with Caracas to export meat and powdered milk. As the Force does not produce powdered milk, the item was provided by the Itambé, with profits from the deal, according to sources familiar with the matter.
The following year, however, by means of Force, JBS went on to get the milk on the market and the Itambé became just one of the suppliers of the product to meet the Venezuelan market. With the new strategy, the sales income was only with Force. That would have contributed, according to the same sources, to boost the results of Force in 2015, the year the company had a profit before interest, taxes, depreciation and amortization (Ebitda) of R $317 million, almost double the previous year.
As it turned out, to the CCPR the positive result in 2015 would have been used to inflate the value of the force in a possible sale. So, on sale for Lala, the Force would have used this data to enhance at the same time when it would have depreciated the Itambé.
When Lala proposed, industry experts considered high the value assigned by the Mexican Force (R $4.325 billion) and below the assigned to Itambé (R $1.4 billion).
But sources close to refute suspicions of Vigor CCPR, stating that the valuation of both companies brushed exports to Venezuela, because they are non-recurring items.
The Force questions the sale of Itambé to for Lactalis because it considers that the operation hurt the shareholders ' agreement with the CCPR in dairy company. By the agreement, was prohibited the sale of participation, by any one of the partners, for a strategic competitor. So, as the understanding of the Force, the CCPR should have given right of first refusal to it if not interested in buy back the 50%.
The CCPR, by your side, argued in the appeal to justice that the shareholders ' agreement was not failed to fulfill, since no longer have validity at the time the repurchase of the completed central 50% and returned to take control of the Itambé. By this understanding, the CCPR have freedom to sell the subsidiary to any player.