SAO PAULO (Dow Jones) -- Brazilian meatpacker JBS SA's plans to raise money to help pay its gargantuan legal fines were thrown into doubt Wednesday after a court suspended the sale of operations in neighboring countries and the country's attorney general filed a motion to freeze assets belonging to the company and its top executives.
JBS agreed in May to pay a record 10.3 billion reais ($3.1 billion) to settle Brazilian authorities' investigation of bribery of hundreds of politicians by the meatpacker's owners.
The company announced at the start of this month the sale of beef assets in Argentina, Paraguay and Uruguay for about $300 million. JBS on Tuesday announced plans to sell another 6 billion reais of assets.
The judge who ordered the suspension of the sale of operations in the neighboring countries based his ruling on a court order from this year that forbade JBS from making "structural changes" to the company. The judge declined to comment on whether his order on Wednesday might apply to the sales announced Tuesday.
JBS said in a regulatory filing that it will appeal Wednesday's ruling. The company had no further comment.
The attorney general's office said in a statement that it wants to freeze JBS assets to guarantee the reimbursement of financial losses of about 850 million reais to Brazil's state development bank. The bank financed the purchase of four companies in the meat sector by JBS, and a different court has found indications of "irregularities" in those operations, the attorney general's office said.
JBS declined to comment on the motion.
The two legal actions could complicate the company's efforts to pay down debt and strengthen its finances ahead of paying the fines. Potential buyers could think twice about purchasing any assets, and creditors could ask for early repayment of loans, according to São Paulo-based corporate law expert Pierre Moreau.
"This increases the risk to buyers," he said. "It's a very uncomfortable situation for JBS, they have to show markets they can manage their debt."
JBS shares closed 5.3% higher, after falling 5.4% on Tuesday. The jump in price Wednesday was more a reaction to Tuesday's decline than to Wednesday's news, said Paulo Figueiredo, director of operations at the FN Capital brokerage in Petropolis.
"People saw an opportunity to buy and ignored the news," he said.