Rochester, NY-based agricultural cooperative Pro-Fac Coop will this year delay the payment of dividends normally paid on or about 31 July on its cumulative preferred stock, non-cumulative preferred stock, and common stock.
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The firm’s board of directors announced on 21 June that Pro-Fac and Agrilink Foods, its wholly-owned subsidiary, incurred a non-cash impairment charge for the FY ending 29 June 2002.
The amount of the charge was originally expected to be about US$105m, but upon further review of the situation, it is now expected to be about US$140m. Agrilink has thus obtained an interim waiver from its existing bank lenders waiving the impact of the impairment charge on a covenant under the bank lending facility, so that it will continue to have access to borrowing under its bank lending agreement to fund its operations through 27 September 2002.
Because the exact amount of the impairment charge has not been determined, and because it is unclear whether it will have any impact on any covenants under Agrilink’s other lending arrangements, Pro-Fac has decided to delay the payment of its dividends. No record date or payment date has yet been fixed.
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