Texas based Pilgrim’s Pride Corp. filed for Chapter 11 bankruptcy protection on Monday, hobbled by its debt load and volatile feed prices.
The nation’s largest chicken producer sought bankruptcy protection in a filing with the U.S. Bankruptcy Court for the Northern District of Texas that states it had $3.75 billion in assets and $2.72 billion in debts as of September 27, 2008.
Ray Atkinson, a spokesman for the company, said the company will not liquidate its assets and would keep operating through a reorganization process.
Problems at the Pittsburg, Texas company have been evident since it announced in September that it would post a “significant loss” in the fourth quarter. It has had to extend its temporary credit line three times since then, the most recent of which faced a deadline of Monday afternoon.
Analyst cite Pilgrim’s Pride Corp. 2007 $1.3 billion purchase of rival Gold Kist Inc. as the cause of the company’s large debt.
The company controls about 23 percent of the U.S. market, and is also a large chicken producer in Mexico. It has 48,000 employees and operates 35 chicken processing plants and 11 prepared-foods facilities.
Pilgrim’s Pride also said in a statement that it is seeking approval to enter into a $450 million debtor-in-possession financing agreement arranged by Bank of Montreal. The company said if the financing is approved by the court, the money will help it run its daily operations, including paying wages and other obligations.
“We expect to emerge from this restructuring a stronger, more competitive company that is well-positioned for growth and enhanced profitability,” Clint Rivers, Pilgrim’s Pride’s president and chief executive said in a statement.
