Armagh-based food processing group Moy Park could be set for a partial flotation this year, the head of its Brazilian parent Marfrig, has confirmed.
In an interview with Bloomberg in São Paolo, Marfrig’s chief executive, Sergio Rial, said the company was examining selling stakes in two foreign subsidiaries – Moy Park and US-based Keystone Foods – so that it could pay down debt.The group has hired banks to advise on a possible sale.
“It could be both or it could be just one, but we’re looking at both,” said Mr Rial of the two possible deals.
“It’s not impossible” that a sale could happen this year, he said. “That doesn’t mean that we’re setting a date for this year, but we have to be ready.”
Moy Park, based in Craigavon, is best-known in Ireland for selling fresh meats under its own name as well as under brands including Jamie Oliver, but the business is also responsible for all of Marfrig's European operations and contributed some €1.5 billion to the Brazilian group's sales last year.
Marfrig, which supplies McDonald’s and Burger King, is facing investor pressure to cut its debt ratios and speed up expansion. Its shares have been punished this year on Brazil’s Ibovespa index.
Mr Rial cautioned in the Bloomberg interview that neither IPO is a done deal and he declined to name the adviser banks.
He acknowledged however that Marfrig has estimated that it would reduce net debt to 2.7 times earnings before interest, taxes, depreciation and amortisation by the end of 2015 by selling 25 per cent to 30 per cent stakes in Moy Park and Keystone. That compares with a ratio of 4.2 at the end of the fourth quarter and an official target of 2.5 by 2018. "We're convinced it's an extremely favourable moment for listings in the United States and Europe," Mr Rial said, adding that proceeds from the IPO could also be used to finance acquisitions or make investments without borrowing money. "There's a lot of demand by European banks for good quality assets and a lack of opportunities there."
A spokeswoman for Moy Park was unable to comment on the possible stake sale.
The business is active in Ireland, Britain and across continental Europe.
(Additional reporting, Bloomberg)