Brazil banks could pay over £827m for Havaianas maker

Brazil’s banking clans could to pay over £827m 3.5bn reals for Shares in Havaianas flip-flop maker Alpargatas for a majority stake in Havaianas.

Proceeds from a sale of Alpargatas, whose shares are up sharply this year, could help pay down the heavy debt load of owners, who are also implicated in a corruption scandal.

Cambuhy Investimentos and Itausa investimentos are working to iron out terms of a deal soon, as the talks has ended with Alpargatas’ controlling share holder J&F investimentos SA.

Itausa oversees the fortune of Brazil’s Villela and Setubal families, who control Sao Paulo- based Itau Unibanco Holding, Latin America’s largest bank by assets. Cambuhy is the family, must raise cash to pay a 10.3bn real leniency fine and refinance looming loan maturities.

J&F has hired banco Bradesco BBI as an advisor on the sale and withstood pressures from Cambuhy investmentos Ltda and Itausa Investimentos SXA to lower the asking price for an 86 per cent stake in Alpargatas.

The Batistas will resume the process to sell Alpargatas by competitive auction “as soon as possible,”

J&F sought a higher price for Alpaegatas, which also manages a wide range of Brazilian fashion brands including beachwear brand Osklen. Brazil’s- Nova musical movement in 1962 created the Havaianas flip-flops and worn globally by celebrities from Blake Lively to Jennifer Aniston.

The Batistas acquired Alpagatas in December 2015 from construction conglomerate Carmargo Correa SA, which was ensnared in the same scandal.

The sale of Alpargatas , Vigor and Eldorado could raise 10 bn reals and cut J&F debts by 10bn reals.

Brazilian meat tycoon, left his reputation turmoil when he departed Brazil for the US this month after confessing to one of the country’s biggest bribery scandals. However, he did take his 30-meter, Italian-made Azimut 100 Leonardo Yact which will be repaired and sold. Batista and his brother Wesley Batista and four other JBS executives signed a plea bargain in a case that reaches to the very top as Mr Batista secretly taped President Michel Temer allegedly discussing bribes and a fellow executive admitted the company paid R$ 600m ( £143.36m , $ 183.8m) in kickbacks to 1, 829 politicians. The company now successive Brazilian governments fostered as a national champion has now been officially downgraded by credit rating agencies including Fitch, the rating agency downgraded JBS’s credit rating from BB+ to BB.

JBS’s solid assets, created by the Batista brothers’ aggressive deal making over the past 10 years , with help from Brazil’s state development bank, BNDES, made it the world’s biggest producer of beef, Chicken and leather and a leader in lamb as well as being the second-largest pork producer in the US, a result of a series of mergers from the acquisition of Swift of the US in 2007 to Pilgrim’s Pride, a US poultry company in 2009. Only last year, JBS generated R$ 170.4bn in sales and had R$ 46.9bn in net debt, and its leverage was relatively high before the scandal broke out.

A Brazilian Sao Paulo bankers was quoted as saying “ Someone very wise once said that at the height of a crisis there a four thing you don’t do- Neither, get married nor get divorced or quit your job nor sell assests”.

Indictment forces Brazil’s president Temer, to seek lawmakers’ support to fend off criminal trial.