April 6, 2018 / 2:18 PM / a year ago

UPDATE 1-Brazil's BRF says chairman has not resigned, shares dive

(New throughout, adds details about stalemate)

By Ana Mano

SAO PAULO, April 6 (Reuters) - Brazilian food processor BRF SA said it has received no formal notice regarding the resignation of Chairman Abilio Diniz, according to a securities filing late Thursday that signaled a continuing impasse related to the election of a new board.

Shares in the country’s largest chicken processor fell almost 3 percent in morning trading. Key shareholders have been pushing for a shakeup at BRF, and local newspapers have been reporting for days that Diniz had reached a tentative agreement to resign.

Shareholders have been calling for change due to poor earnings results and new allegations that the company flouted food safety rules sparking export bans to be imposed on some of its facilities. An extraordinary board meeting is scheduled for April 26 to elect a new board.

In a letter sent to BRF, Diniz told the company he was still in talks with certain shareholders aimed at negotiating names to compose the new board, the filing said.

Brazilian newspapers reported on Wednesday that Diniz would resign this week. On Friday, they reported talks reached a stalemate because the parties could not agree on proposed board replacements, also citing dissent over executive compensation.

The board will be reconvened on Friday, a source said on condition of anonymity because the matter is not public.

BRF declined to comment.

Diniz told BRF no agreement had been made with the relevant shareholders until 5:30 p.m. on Thursday, adding it was premature to disclose information to the market, the filing said.

Petros and Previ, the pension funds which hold a combined 22 percent stake in BRF, are pushing for the dissolution of BRF’s board after the company posted its worst-ever annual result in 2017.

The dissolution would likely lead to changes in the executive management.

In official communications with BRF, Petros and Previ said they continue to support a list of new board members unveiled on Feb. 24, according to BRF’s statement. (Reporting by Ana Mano; Editing by David Gregorio)

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