JAMAICA Broilers Group (JBG) is weighing a potential exit from its troubled US meat business as it navigates the aftermath of a massive fraud, with executives declaring the company’s financial “closet is clean” after a sweeping overhaul.

The strategic review of the US meat division was revealed as the company outlined a robust recovery plan, including a pending $24-billion refinancing deal and a dramatic operational turnaround that has already slashed production costs. The announcement signals a potential strategic retreat from the business unit at the centre of a scandal that forced $46 billion in balance sheet adjustments and erased the company’s shareholder equity.

“We might be taking some difficult decisions on the meat business,” said Chris Levy, president and CEO of the group, speaking at the Mayberry Investments Limited Investor Forum on Friday. “We’re not sure just yet (but) I’m not happy with how we’re structured here and in terms of our competition.”

The potential exit comes after a “coordinated and deliberate” fraud in the US meat business, Levy said, where for nearly four years costs were hidden on the balance sheet to artificially inflate profits. The scheme unravelled after a whistleblower tipped off the management, who had already been alarmed that the operation was booking profits but not generating corresponding cash.

“What was happening is that the cost of sales were being underestimated or under-reported and those numbers were being hidden on the balance sheet,” Levy explained. “The entire scheme just unravelled in a matter of two months… every day you’re just waiting for the next blow, the next blow, the next blow.”

The scandal, isolated to the US meat business, stands in stark contrast to the performance of JBG’s other divisions. Ian Parsard, the group chief financial officer, emphasised that the company’s three other “engines” — its Jamaican operations (Best Dressed Chicken and Hi-Pro) and the US fertile egg business — remain strong and were unaffected.

Clean slate and new controls

JBG has moved aggressively to rebuild its North American operations. The overhaul included installing an entirely new accounting team in the US with direct reporting lines back to Jamaica. “We put in an entire new accounting team here and we have very specific reporting relationships changed back into what I would call the Jamaica Financial and Accounting Network,” Levy said. “We’ve also changed our auditors,” he added, noting the failures of several layers of audit oversight in both countries.

Parsard underscored the significance of the new audit firm, describing them as “very, very experienced in the middle market in the US” with deep poultry-sector knowledge. “They understand the business. These guys know where to look. They know what to look for,” he said.

Alongside the personnel changes, JBG brought in an IBM team to conduct a comprehensive review of processes and IT systems. Parsard said this led to the immediate reinstatement of broken controls and the introduction of stronger system safeguards intended to prevent any recurrence.

The path forward

The company’s recovery is anchored by a complex $24-billion refinancing package that Parsard said is in its “very, very last stages”, supported by what he described as “unbelievable” cooperation from lenders. The arrangement is expected to place lenders under common covenants and move reclassified loans back into the long-term category once completed.

Operationally, the US meat business — now under strategic review — has shown a sharp improvement in efficiency. Levy reported a significant reduction in production costs, saying, “We were running about US$2 a pound in terms of cost [for meat]. Right now we’re at US$1.35. The operational changes that we’ve made here are tremendous.”

But the recovery faces external pressures. Levy warned that US meat prices have fallen sharply, creating a difficult environment despite the internal improvements. The combination of market headwinds and the legacy of the fraud is driving the review of the division’s future. Still, Levy expressed confidence in the wider group, stating that “the company is good and the company is strong”, supported by committed lenders and a focused team.

A final decision on whether JBG will divest or significantly restructure the US meat business is expected in the coming months, as the company continues to stabilise its operations and rebuild its balance sheet.

LEVY….the closet is clean. All skeletons have been removed.