Pilgrim's Pride Announces Definitive Agreement

US - On 29 September, Pilgrim's Pride Corporation announced that three days previously, it successfully completed a definitive written agreement with its lenders to temporarily waive the fixed-charge coverage ratio covenant under its credit facilities through October 28, 2008.
calendar icon 30 September 2008
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The lenders also have agreed to continue to provide liquidity under these credit facilities during this same 30-day period in accordance with the terms of the waiver agreement.

Pilgrim's Pride had requested the temporary waiver after notifying lenders that it expects to report a significant loss in the fourth quarter of fiscal 2008, which ended September 27, when it files its Form 10-K for such period.

The company attributed the anticipated loss to high feed ingredient costs, continued weak pricing and demand for breast meat, and the significant negative impact of hedged grain positions during the quarter.

The company does not anticipate that any significant hedging gains or losses will be recognized beyond the fourth quarter of fiscal 2008 on the few positions that remained open past the end of such period.

Separately, Pilgrim's Pride also announced that it has retained Bain Corporate Renewal Group to work with management on a range of strategic issues and operational improvement. Additionally, Pilgrim's Pride has engaged Lazard as its investment banker to provide strategic advice regarding re-financing and re-capitalization opportunities.

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