Pilgrim's Pride gets financing after Ch. 11 filing

PITTSBURG Texas Pilgrim’s Pride Corp., the poultry supplier giant that filed for Chapter 11 bankruptcy protection Monday, has received court approval to access $365 million in debtor-in-possession financing so that it can continue to operate.

It also received permission to honor current rebate and prepayment programs, coupon programs, product replacement, and customer refunds, the company said.

Amajor poultry supplier to the foodservice industry, Pilgrim's Pride provides about a quarter of all U.S. broilers and operates 35 chicken processing plants and 11 prepared-foods facilities across the country.

Clint Rivers, Pilgrim's Pride president and chief operating officer, said in a statement that he expected "it will be 'business as usual' as we work through this restructuring process ... Our dedication to our customers, employees and business partners will not change."

Industry observers blamed Pilgrim's Pride's financial problems on elevated feed costs, low poultry prices and a high level of debt, which was mostly tagged to the company's acquisition of Atlanta-based poultry supplier Gold Kist Inc. in 2006. The transaction had a total equity value of about $1.1 billion, plus the assumption of about $144 million of Gold Kist's debt.

For the fourth quarter ended Sept. 27, Pilgrim's Pride posted a loss of $802 million on sales of $2.17 billion. The loss included an impairment charge of $501.4 million that was chiefly related to a write-down of goodwill at Gold Kist. The latest quarter loss compares with year-ago profit of $33.2 million on sales of $2.11 billion.