JBS talks revival of U.S. branch's IPO
JBS SA, the world's biggest meat producer, is considering reviving plans for an initial public offering of its U.S.-based unit as North American stocks become more expensive relative to Brazil's, according to two people with direct knowledge of the matter.
The Sao Paulo-based company is sounding out investment bankers for the proposal to sell shares in JBS USA Holdings Inc., as the Greeley, Colo.-based company is known, one of the people said, asking not to be identified because the matter is private and no decisions have been made. The transaction could happen as soon as this year, the person said.
JBS shelved the proposed IPO in 2009 when Brazilian markets offered better valuations. Now, JBS' enterprise value in Brazil is 6.6 times earnings before interest, taxes, depreciation and amortization while U.S.-based rival Springdale-based Tyson Foods Inc. trades at 11 times, according to data compiled by Bloomberg. JBS's ratio peaked at 31 in January 2010.
Proceeds from the IPO could be used to reduce debt and obtain an investment-grade credit rating or make acquisitions, one of the people said. JBS didn't respond to requests for comment made by email and telephone.
JBS canceled the IPO of its JBS Foods SA unit in Brazil on Feb. 27, citing local market conditions.
-- Bloomberg News
Caesars to open $125M Atlantic City site
Caesars Entertainment Corp. is building a $125 million conference center in Atlantic City, N.J., to attract corporate visitors to the struggling seaside gambling resort, where a third of the casinos closed last year.
The 100,000-square-foot Waterfront Conference Center, which is set to open Aug. 7, already has contracts for 60 events that will bring in $16 million in revenue, said Michael Massari, senior vice president for Caesars. The company is counting on business travelers, which now account for 1 percent of visitors, to make up for a decline among gamblers.
Atlantic City's casino business and tax collections have eroded because of the expansion of gambling in neighboring states, including Pennsylvania and Delaware. The two emergency managers overseeing efforts to stabilize the city's finances said that it's facing a $101 million deficit this year, which may require it to eliminate jobs or delay debt payments.
The conference center is connected to the Harrah's casino, which is owned by the Las Vegas-based Caesars. When opened, it will have carpeted floors and recessed ceilings designed to be more attractive than the concrete-and-steel ones typical in convention centers.
Caesars currently receives about $400 million annually from corporate events and association meetings, with all but about $50 million of it from Las Vegas, Massari said.. Only 1 percent of the business comes from Atlantic City, he said.
-- Bloomberg News
Study: Louisiana film tax credits costly
BATON ROUGE, La. -- Louisiana's film tax-credit program produced hundreds of millions in household earnings and thousands of jobs last year, but at a steep cost to the state treasury, according to a new study of the tax breaks done for the state.
Economist Loren Scott estimated Louisiana paid more than $14,000 per job, spending $222 million on film tax credits in 2014 and getting back only $51 million for the state treasury, a return of about 23 cents on the dollar.
Lawmakers, struggling to balance next year's budget with a $1.6 billion shortfall, are eyeing the program for changes, and the economist's report suggests several ideas to tighten the list of expenses that qualify for the tax credits and to more closely audit the spending.
Scott wrote the tax breaks "clearly have an economic impact to the state of Louisiana in the form of increased business sales and jobs for Louisiana residents," but he added that some expenditures "have minimal direct impact to Louisiana's economy."
The report was done for the Louisiana Department of Economic Development and released earlier this month. It looked at the economic impact of tax credit programs designed to bolster three entertainment industries: movie and TV productions, sound recordings, and musical and theatrical productions. The state spent nearly $239 million on tax breaks across the three areas last year -- with the lion's share going to the film tax breaks.
Gov. Bobby Jindal didn't propose adjustments to the film tax breaks in his budget recommendations, but Economic Development Secretary Stephen Moret told lawmakers recently that "it would be constructive to make changes."
-- The Associated Press
SunEdison buys batteries to power India
SunEdison Inc., a U.S. solar-panel maker and power-plant developer, is buying 1,000 batteries from closely held Imergy Power Systems Inc. to build microgrids in rural India.
Each battery will be able to provide one village with 10 hours of daily power, said Tim Derrick, general manager of advanced solutions and energy storage for Missouri-based SunEdison.
SunEdison is seeking to develop 5,000 such systems by 2020 to store solar energy for 20 million people who otherwise wouldn't have electricity. The first 1,000 will be developed in the next two to three years.
Imergy's batteries employ vanadium, a metallic chemical element, as a key ingredient that it recycles from industrial waste such as oil-field sludge. Unlike other batteries, they can be recharged and discharged indefinitely and last at least 20 years.
SunEdison this month purchased Solar Grid Storage LLC to add battery technology to renewable-energy projects. Solar Grid, which uses lithium-ion batteries in systems that can support as much as 10 megawatts, has four projects in operation and is building at least three more this year. Other companies including SolarCity Corp. are developing microgrids that soon may displace traditional utility companies as energy from intermittent sources can be used throughout the day.
SunEdison, in addition to buying the battery systems, is increasing its minority stake in Fremont, Calif.-based Imergy. Financial terms for both transactions weren't disclosed.
-- Bloomberg News
Nasdaq, NYSE step toward bitcoin trade
The biggest U.S. stock exchange operators are taking steps to embrace bitcoin, spurring speculation the digital currency is coming up from underground.
Nasdaq OMX Group Inc. revealed earlier this month that New York-based Noble Markets, a platform for trading bitcoin, has agreed to license Nasdaq's X-stream technology. Noble is adopting the same software used by securities exchanges around the world, and a related system runs the Nasdaq Stock Market, one of the biggest equity exchanges.
The news follows the New York Stock Exchange's January agreement to invest in Coinbase, another platform for trading the digital currency.
Markets for buying and selling bitcoin took a reputational hit when one of the biggest, Mt. Gox, failed in 2014. Mt. Gox filed for bankruptcy after discovering it had lost bitcoin belonging to customers and itself. Deploying Nasdaq's software could give Noble greater legitimacy.
"It is a vote of confidence in bitcoin the technology," Nicholas Colas, chief market strategist at Convergex Group, said. "Now that you are seeing big organizations providing technology, there's a feeling that bitcoin is here to stay."
While some bitcoin startups have recently built their own trading technology, Nasdaq's system has been battle-tested for years. Nasdaq provides trading software to companies including Japan Exchange Group Inc. and Singapore Exchange Ltd., which are among the biggest market operators in the world.
-- Bloomberg News
Ford assembles $760M factory in China
DETROIT -- Ford has opened its sixth assembly plant in China, where it will build a version of the Edge midsize crossover designed exclusively for the Chinese domestic market.
The Edge will be the first vehicle produced at the $760 million plant that was designed with the flexibility to make up to six different vehicle models with capacity for an additional 250,000 vehicles per year.
Ford CEO Mark Fields was in Hangzhou to mark the start of production of the newest plant for joint venture Changan Ford, which now has capacity to build 1.4 million vehicles per year in China.
The new Hangzhou plant will build a three-row version of the Edge that is slightly longer and taller than the two-row model that is built in Oakville, Ontario, Canada, for export to the rest of the world.
Ford was a latecomer to China but has been aggressively adding plants and has promised 15 new vehicles for the market by 2015, including the Mustang. Sales have grown steadily -- up 19 percent last year -- and the additional capacity makes it possible to overtake Hyundai as the fourth-best foreign automaker in the country. There is still a long way to go to reach the volume of leaders Volkswagen and General Motors. Nissan is No. 3.
-- Detroit Free Press
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