| SAO PAULO
SAO PAULO (This May 23 story was corrected to fix headline and para 1 to delete erroneous reference to "hired". Corrects paras 7 and 8 to show that Bradesco was told to seek buyers for Vigor and advised on plans to merge Alpargatas SA's different classes of stock, not to sell the company)
Brazil's JBS SA (JBSS3.SA) and its controlling shareholders, facing financial fallout from a corruption scandal, have asked Banco Bradesco SA's investment banking unit to help find bidders for some assets, three people with direct knowledge of the situation said on Tuesday.
Members of the billionaire Batista family, which owns about 42 percent of JBS, are looking for ways to raise cash after prosecutors demanded they pay an 11 billion-reais (2.5 billion pounds) fine to settle allegations they bribed scores of politicians, one of the people said.
The bribery allegations and related probes have spooked investors in JBS, which has 17.9 billion reais in short-term debt, cutting its share value by a third.
The scandal, which has led to calls for the resignation of Brazilian President Michel Temer, has laid bare the Batistas' cosy relationship with some of the country's most powerful politicians whom they admitted to bribing to obtain cheap government financing and other favours.
While the Batistas initially rejected the size of the proposed fine, it looks unlikely to be significantly reduced, pushing their holding company J&F Investimentos SA to consider divestitures to raise cash to pay for it, said the same person, who requested anonymity because the asset sale plan remains private.
J&F Investimentos denied having hired Bradesco or any other bank to sell assets. JBS and Bradesco did not respond immediately to requests for comment.
The Batistas had considered selling dairy company Fábrica de Produtos Alimentícios Vigor SA and sportswear and shoemaker Alpargatas SA (ALPA4.SA) - both owned by the family's main investment holding vehicle - earlier this year, the people said. J&F has hired Bradesco to seek buyers for Vigor and the bank had also been advising the family on plans to merge Alpargatas' different classes of stock into common shares, the people said.
One of the people said Alpargatas, maker of Havaianas flip flops, which J&F acquired from construction conglomerate Camargo Correa SA two-and-a-half years ago for 2.7 billion reais, could now be worth more than 3 billion reais.
The situation underscores the challenges facing the Batistas, who transformed JBS from a primarily Brazilian company into a global behemoth that operates in four continents in less than a decade, with the help of low-cost government loans.
(Reporting by Tatiana Bautzer and Guillermo Parra-Bernal; editing by Andrew Hay and Christian Plumb)