From the 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.
From the Wall Street Journal (sub. req’d)
Pilgrim’s Pride vaulted over Tyson to become the market leader with its $1.1 billion acquisition of rival Gold Kist Inc., only to be squeezed by over-production at home and abroad as well as rising commodity costs. The company was also left exposed by loss-making corn-futures contracts purchased when feed costs were spiraling.
Bank of Montreal has lined up to provide $450 million in debtor-in-possession funding, subject to approval by the bankruptcy court in the northern district of Texas.
The company’s Mexican operation – ranked No. 2 in poultry sales – wasn’t included in the filing, and could emerge as a potential target for Tyson or Sanderson Farms, though analysts estimate it would generate net proceeds of just $100 million