Havaianas flip-flops sold in 1bn deal

Sydney, Australia - Oct 23, 2016. Big red havaianas thongs on Tamarama beach. Sculpture by the Sea is one of the largest free to the public sculpture exhibitions.

The maker of Havaianas, Alpargatas (BVMF:ALPA4), has been sold to three prominent Brazilian banking groups in a $1.1 billion dollar deal.

Previously owned by the corruption hit J&F group, it was sold on in attempts to offload business and so the group could afford to deal with their latest scandal. 

It is believed that the money made from the sales will contribute to the repayment of large debts and fines of over $3 billion that the J&F group must pay off following their most recent corruption scandal.

J&F must repay R$18.1bn ($5.5bn) to cancel our remaining debt, whilst also paying a R$10.3bn ($3.2bn) fine after Joesley and Wesley Batista admitted to bribing up to 1,900 politicians in a scandal.

President Michel Temer’s position is also in jeopardy following the emergence of the scandal. In a statement, he denied the accusations.

“President Michel Temer never solicited payments to obtain the silence of ex-deputy Eduardo Cunha,” the statement said. “He did not participate nor authorise any movement with the objective of avoiding a plea bargain or collaboration between the justice system”

A poll this year showed that 92 percent of Brazilians thought the country was on the wrong path, and the President had an approval rating standing of 4 percent.

We see the sale of Alpargatas just 18 months after J&F group bought the flip flop company from construction company Camargo Corrêa, who was also surrounded by corruption claims.

Investors are to pay R$14.25 per share and R$11.40 to acquire the 54.2 percent of Alpargatas that is owned by J&F.

Alpargatas reached R$14.20, increasing 1.4 per cent at close on Wednesday.

The Brazilian footwear brand is perhaps the most famous flip-flop brand, which has been highly successful in Brazil and internationally. An estimated 200 million pairs of the footwear sold every year with celebrities such as Jennifer Aniston and Sienna Miller being associated with the footwear brand.