S.A. Fabrica de Produtos Alimenticios Vigor Announces Commencement of Consent Solicitation

SAO PAULO, Sept. 1 /PRNewswire/ -- S.A. Fabrica de Produtos Alimenticios Vigor ("Vigor" or the "Issuer") announced today that it is soliciting consents from the holders of U.S.$100.0 million in aggregate principal amount of its 9.25% Step-up Notes due 2017 (the "Notes") to, among other things, amend certain provisions in the indenture governing the Notes (as supplemented and amended from time to time, the "Indenture").

Vigor is currently a subsidiary of JBS S.A. ("JBS").  JBS currently intends to merge Vigor into JBS, with JBS as the surviving entity (the "Vigor/JBS Merger").  If the Vigor/JBS Merger occurs, JBS will assume all of Vigor's obligations under the Indenture and will be restricted by its covenants.  The existing covenants in the Indenture, to the extent that such covenants are more restrictive than the covenants in JBS' existing indebtedness, will limit the flexibility of JBS and its subsidiaries to conduct their respective businesses.  Vigor is seeking Consents from Holders of the Notes to the Proposed Amendments in order to preserve such flexibility.  The operativeness of the Proposed Amendments is not conditioned on the consummation of the Vigor/JBS Merger.

Holders of the Notes are referred to the Consent Solicitation Statement, dated September 1, 2010, and the related Consent Letter for the detailed terms and conditions of the Solicitation Statement.  The Consent Solicitation commenced today and will expire at 5:00 pm (New York City time) on Friday, September 24, 2010, unless extended or earlier terminated (such date and time, as the same may be extended or earlier terminated by the Issuer, the "Expiration Time").  Holders who deliver their Consents by 5:00 pm (New York City time) on Monday, September 13, 2010 (the "Early Consent Time") shall receive an Early Consent Fee (as defined below) and Holders who deliver their Consents after the Early Consent Time but prior to the Expiration Time shall receive the Reduced Consent Fee (as defined below).

Only holders of the Notes ("Holders") as shown in the records maintained by The Bank of New York Mellon (as Trustee) at 5:00 p.m., New York City time, on Monday, August 31, 2010 (such date and time, including as such date and time may be changed from time to time, the "Record Date") are entitled to consent to the Proposed Amendments.  If a supplement to the Indenture governing the Notes (the "Supplemental Indenture") is executed, Holders of the Notes as of the Record Date that validly deliver their Consents and consent to the Proposed Amendments relating to the Notes will receive a cash payment within five business days of the Expiration Time as follows: (i) if such Holders validly deliver their Consents prior to the Early Consent Time, the payment shall be equal to U.S.$25 per U.S.$1,000 principal amount of Notes (the "Early Consent Fee") or (ii) if such Holders validly deliver their Consents after the Early Consent Time but prior to the Expiration Time, the payment shall be equal to U.S.$20 per U.S.$1,000 principal amount of the Notes (the "Reduced Consent Fee," together with the Early Consent Fee the "Consent Fees"). Holders that deliver Consents will be able to revoke their consent to the Proposed Amendments at any time prior to the execution and delivery of the Supplemental Indenture in accordance with the procedures set forth in the Solicitation Statement and the Consent Letter.  The Supplemental Indenture will not become operative until all Consent Fees have been paid.  

In order to execute the Supplemental Indenture which includes each of the provisions in the Proposed Amendments, the Issuer must receive consents from Holders as of the Record Date representing at least 66⅔% in aggregate principal amount of the Notes; provided that if the Issuer receives consents of Holders as of the Record Date of at least a majority of the aggregate principal amount of the Notes prior to or by the Expiration Time, the Issuer may elect, in its sole discretion, to execute the Supplemental Indenture with the Majority Consent Modifications (as defined below) (such consents from Holders representing at least 66-2/3%, or in the sole discretion of the Issuer, at least a majority, of the aggregate outstanding principal amount of the Notes, the "Required Consents").  The Proposed Amendments, other than the Proposed Amendments (1) amending the defined terms "Change of Control" and "Permitted Holders"; (2) relating to the "Offer to Purchase" provision; and (3) relating to the "Limitation on Asset Sales" covenant, including the definitions used therein, are the "Majority Consent Modifications."  

The Issuer reserves the right to modify the Solicitation Statement and the terms and conditions of the Consent Solicitation or to terminate the Consent Solicitation at any time prior to the execution and delivery of the Supplemental Indenture.  The Issuer intends to issue a press release promptly after execution and delivery of the Supplemental Indenture.

The Information Agent for the Consent Solicitation is:

Any questions or requests for assistance or for copies of the Solicitation Statement, the Consent Letter or related documents may be directed to the Information Agent at its telephone number set forth above.  A Holder as of the Record Date also may contact the Solicitation Agent at its telephone number set forth below or such Holder's broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Consent Solicitation.

The Solicitation Agent for the Consent Solicitation is:

THIS PRESS RELEASE IS NOT A SOLICITATION OF CONSENTS WITH RESPECT TO ANY NOTES.  THE CONSENT SOLICITATION IS BEING MADE SOLELY BY THE SOLICITATION STATEMENT.

Forward-Looking Statements

This press release contains forward-looking statements.  These include statements regarding risks and uncertainties, including, but not limited to, statements about the benefits of certain transactions to be undertaken following the Consent Solicitation, financial trends affecting our business, and future projections.  These statements are based on the Issuer's and JBS' estimates and assumptions and on currently available information. To the extent that the forward-looking statements include information concerning the Issuer's or JBS' possible or assumed future results of operations, the Issuer's and JBS' actual results may differ significantly from the results discussed.  Forward-looking information is intended to reflect opinions as of the date this release was issued, and such information will not necessarily be updated or revised by the Issuer or JBS, whether as a result of new information, future events or otherwise.  It should be noted that JBS is required to file annual and current reports and other information with the Comissao de Valores Mobiliarios, the Brazilian Securities and Exchange Commission, and with the BOVESPA Stock Exchange.  For further information on factors which could impact JBS and the statements contained herein, please refer to these filings.

SOURCE S.A. Fabrica de Produtos Alimenticios Vigor; JBS S.A.