Pilgrim’s Pride Reemerges

Brent Finnegan -- December 29th, 2009

Pilgrim’s Pride, the poultry processing corporation that filed for Chapter 11 bankruptcy over a year ago, reorganized and reemerged from bankruptcy this week.

Pilgrim’s Pride (PGPDQ) and six subsidiaries emerged from Chapter 11 bankruptcy protection following a year-long restructuring. As part of the restructuring, the chicken producer entered into a $1.75 billion exit credit facility with several financial institutions. Shares of the reorganized company will begin trading on the New York Stock Exchange on Tuesday under the symbol PPC.

While under Chapter 11, Pilgrim’s made a deal with Brazilian meat packing giant, JBS.

The reorganized company issued 64% of its common stock to JBS USA Holdings, Inc. in exchange for $800 million in cash. The remaining 36% of the common stock of the reorganized company was issued to stockholders existing immediately prior to the effective date. (PR Newswire)

Pilgrim’s owns and operates a plant in Timberville and an office in Harrisonburg, and buys chickens from many farms in and around Rockingham County.

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2 Responses to “Pilgrim’s Pride Reemerges”

  1. Although this is good news for local poultry producers and people who work in the Timberville plant, the fallout for white collar Pilgrim’s Pride workers remains to be seen. JBS already has a corporate headquarters in Colorado and may be axing some or many of the corporate side employees, some of whom work at the Eastern Division Headquarters right next to the plant in Timberville.

  2. A quick follow-up, and a little background

    Crisis hit the company after it bought rival Gold Kist for $1.1 billion in December 2006, making Pilgrim’s the country’s biggest producer just before corn-based feed prices skyrocketed and wholesale chicken prices crashed. Pilgrim’s closed nine plants, canceled or renegotiated some 13,000 contracts and laid off more than 10,000 workers. Snyder acknowledged that many contract growers who borrowed heavily to build chicken houses to supply the now-closed plants will be in difficulty unless a rival producer like Tyson takes them on.

    On Monday, Pilgrim’s shares, which at one point fell as low as 17 cents each, closed at $8.40 as an over-the-counter stock. The company announced that it will be relisted on the New York Stock Exchange today under the PPC symbol.

    Snyder noted that not a single major U.S. bank that received bailout funds offered credit to a post-bankruptcy Pilgrim’s, forcing the company to look abroad. Aside from Dutch, British and Canadian banks, lenders included CoBank, a cooperative bank created by a group of U.S. agricultural lenders, he said.

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