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Thu 5 Jan 2017 11:00 AM

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Brazilian food exporter BRF to raise $1.5bn from IPO of Dubai unit

One Foods controls 45 percent of the poultry market in Saudi Arabia, the UAE, Kuwait, Qatar and Oman

Brazilian food exporter BRF to raise $1.5bn from IPO of Dubai unit
London is likely to be picked as the listing place after both BRF and the banks dropped the idea of a listing in the UAE, where One Foods is based.

Brazilian food exporter BRF SA is seeking to raise about $1.5 billion from the sale of a 20 percent stake of a Dubai-based 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 percent of the poultry market in Saudi Arabia, the UAE, Kuwait, Qatar and Oman.

For years, BRF's predecessors Sadia SA and Perdigão SA sold their products to Middle Eastern countries, which observe strict animal slaughtering and handling techniques.

The operations of One Foods were formally launched on Wednesday, renamed from Sadia Halal, 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 $60 billion by the end of the decade.

"This will put our company closer to local consumers," the filing quoted BRF Chief Executive Pedro Faria as saying, following the launch of One Foods.

According to the securities filing, Patricio Rohner will become the CEO of One Foods. Rohner was previously BRF's head of business for the Middle East and Northern Africa.

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 UAE, 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 $6.5 billion. Enterprise value is a widely used gauge of a company's total value comprising market capitalisation, debt, minority interest and cash.

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