JBS, the world’s largest beef processor based in Brazil, has announced that its indirect subsidiary JBS Food Canada has reached an agreement to sell its major cattle feedlot located in the province of Alberta in a deal valued at $40m (€35m).

JBS has said it will sell the cattle feedlot and the adjacent lands to MCF Holdings, a subsidiary of the livestock trading firm Nilsson Bros, which previously owned the feedlot. The feedlot has the capacity for 75,000 head of cattle.

Under the terms of the agreement, MCF will continue to supply cattle to JBS Canada’s nearby beef processing facility. Completion of the transaction is subject to regulatory review and approval. The sale of this feedlot is the latest stage of JBS’s plans to offload non-core assets in a bid to pay down the group’s spiralling debt costs.

Asset fire sale

JBS has already announced that Northern Ireland poultry processor Moy Park is on the market for sale, while other assets including its 19% stake in the Brazilian dairy company Vigor Alimentos, as well as the Five Rivers cattle feedlot in the US that has the capacity to finish close to 1m cattle per year will also be sold.

The Brazilian processor has also struck a $300m (€266m) deal with rival processor Minerva to sell its beef processing businesses in South America. The deal includes the sale of five beef processing units located in Argentina (1), Paraguay (3) and Uruguay (1), which have a combined slaughtering capacity of 9m head of cattle per annum.

JBS is aiming to raise $1.8bn (€1.6bn) from the sale of non-core assets in what is undoubtedly a fire sale to shore up the company’s highly leveraged balance sheet with net debts of $14bn (€12.5bn) at present.

The cost of carrying this debt has skyrocketed after JBS’s parent company J&F Investimentos was fined €3bn by Brazilian prosecutors following a lengthy corruption and bribery investigation.

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