Pilgrim's Pride files for bankruptcy
December 01, 2008
by FoodBusinessNews.net Staff
PITTSBURG, TEXAS — Facing financial challenges, Pilgrim’s Pride Corp., one of the nation’s leading chicken processors, has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Northern District of Texas.
"Over the past year, Pilgrim’s Pride has faced a number of significant challenges, including high feed-ingredient costs, an oversupply of chicken, weak market pricing and softening demand," said Clint Rivers, president and chief executive officer. "After careful consideration of all available alternatives, the company’s board of directors determined that a Chapter 11 filing was a necessary and prudent step and the best way to obtain the financing necessary to maintain regular operations and allow for successful restructuring. We expect to emerge from this restructuring a stronger, more competitive company that is well positioned for growth and enhanced profitability."
The company said operations are expected to continue as normal during the bankruptcy process. Operations in Mexico and certain operations in the United States were not included in the filing.
The company also is seeking the approval to enter a $450 million debtor-in-possession financing facility arranged by the Bank of Montreal as leading agent.
According to a Nov. 28 filing with the Securities and Exchange Commission, for the fourth quarter ended Sept. 27, Pilgrim’s Pride is expecting to post a loss of $802 million. This takes into account a charge of $501.4 million related to the acquisition of Gold Kist, Inc.
Not considering the Gold Kist acquisition and an income tax valuation allowance, the company’s net loss would have been $265.6 million.
Sales for the fourth quarter were $2.17 billion.
For the full-year ended Sept. 27, the company anticipates a loss of $998.6 million. Not considering the Gold Kist acquisition and an income tax valuation allowance, the loss for the year would have been $437.2 million. Sales for the year were $8.5 billion.