Saudi Arabia’s SALIC pledges to invest in BRF’s potential $900mln share offer

Saudi Arabia’s SALIC pledges to invest in BRF’s potential $900mln share offer

SAO PAULO - Saudi Arabia's agricultural and livestock investment firm SALIC has committed to buy shares in a potential $900 million stock offering by BRF SA, the Brazilian firm said, a move that would expand SALIC's footprint in the country's meat industry.

Marfrig Global Foods SA, BRF's controlling stakeholder, had also pledged to subscribe to the planned new share offer, BRF said in a filing on Wednesday. BRF shares jumped almost 16% on the news.

The move is seen as strategic for Saudi Arabia, a major buyer of Brazilian meat products. The Saudi government, through the Saudi Public Investment Fund (PIF) which owns SALIC, had previously partnered with BRF for a halal meat joint venture .

The fresh capital injection will be key to reduce BRF's high financial leverage, analysts said.

Shares in BRF surged as much as 15.7%, making it the top gainer on Brazil's benchmark stock index Bovespa, which slipped 0.3%. Marfrig stock rose around 5%.

"Saudi Arabia has been BRF's largest chicken importer in recent years," analysts at Bradesco BBI said in a note to clients, adding the proposed transaction could also "reduce investor concerns that recent cases of bird flu (so far only in wild birds) in Brazil could at some