Pilgrim’s Pride files for Ch. 11
Atlanta Business Chronicle
Chicken processor Pilgrim’s Pride Corp., which in 2007 acquired Atlanta-based Gold Kist Inc., confirmed Monday it has filed a voluntary petition for Chapter 11 bankruptcy protection.
The filing, which was made in the U.S. Bankruptcy Court for the Northern District of Texas, if approved, will enable the company to restructure under a Chapter 11 bankruptcy reorganization plan.
Citing the company’s difficulty weathering tough economic cycles, the challenges of high feed prices, unbalanced chicken inventory, weak market pricing and falling demand, Pilgrim’s Pride (NYSE: PPC) said it filed for bankruptcy protection after determining a Chapter 11 reorganization is the best solution to address the company’s short-term operational and liquidity difficulties.
In a press statement, Pilgrim’s said, “In conjunction with the filing, the company is seeking approval to enter into a $450 million debtor-in-possession financing facility arranged by Bank of Montreal as lead agent (the DIP financing). If approved by the court, the DIP financing will provide an immediate source of funds to the company, enabling it to satisfy the customary obligations associated with the daily operation of its business, including the timely payment of employee wages and other obligations.”
The company said its operations will continue as normal. Operations in Mexico and certain operations in the United States are not included in the filing.
Ray Atkinson, a spokesman for the company, said the filing will not have a direct impact on jobs. In fact, he said, the company believes the financing supplied through the reorganization plan would allow Pilgrim’s to reinvest and restructure the company.
Pilgrim’s reiterated in a press release that the company has requested permission to continue paying payroll, wages, benefits and other operational expenses. The corporation added that suppliers should expect to be paid for post-petition purchases of goods and services.
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