EM Falcon seeks noteholder OK for waivers linked to Marfrig asset sale

By Toni Weeks

San Luis Obispo, Calif., Sept. 26 - EM Falcon Ltd. is requesting consent of holders of its R$570 million of pass-through notes due 2019 to waive any potential event of default by the issuer and the right to declare early termination of the issuer's obligations under the debenture deed, according to a notice from note trustee Bank of New York Mellon.

The company said that the R$5.85 billion sale by Marfrig Alimentos SA to JBS of shares held by some of Marfrig's subsidiaries that own the Seara Brasil business unit as well as the sale of 100% of the shares of its Zenda subsidiary, which operates its leather business in Uruguay, could potentially trigger a default under the note indenture for Marfrig's fourth issuance of simple non-convertible unsecured debentures. These notes were then issued to EM Falcon, which were then sold bonds to investors.

EM Falcon must receive consent from holders representing a majority in principal amount of the notes to approve the waivers so that Marfrig may sell shares to JBS. The deadline for consents was at noon ET on Sept. 25. Results of the vote will be announced on Sept. 27.

Dublin-based EM Falcon is a special purpose vehicle established by Marfrig for the purpose of issuing asset-backed securities. Marfrig Alimentos is a Sao Paulo, Brazil-based food processing company.

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