Brazil’s fourth largest Brazilian exporter of beef has halted slaughtering operations at all 11 of its plants and sent workers home, local Brazilian media reports. In addition, Independencia has not paid cattle suppliers for several days and has returned most cattle to suppliers.
According to the Brazilian Secretary of External Commerce Independencia was the fourth-largest Brazilian exporter of fresh and frozen beef and one of the leading Brazilian producers of leather in 2007.
As of last December 31, Independencia's total daily slaughter capacity was approximately 12,000 head of cattle and its daily leather processing capacity was approximately 10,000 hides (not including additional outsourced capacity of 3,000 hides per day). Brazilian development bank BNDES is reported to have a 33% stake (204 million US dollars) in Independencia.
The company has made no official statement yet, though they told agencies earlier in the week a statement would be forthcoming.
In markets, the news has taken down the whole sector, already shaken by the default of Brazilian beef producer Arante, which failed to pay a single interest payment on the 150 million USD the company borrowed from international markets in June of 2008.
Independencia, likewise tapped global markets for 300 million USD in borrowing in May of 2008, on top of an already outstanding borrowing of 225 USD million in January of 2007.
According to leading investment bank BBO, the news has weighed heavily on markets already jittery from Arante's default in December.