Ailing US poultry giant Pilgrim’s Pride has won court approval to gain access to funding to ensure the business can pay its staff and suppliers.
The company, which on Monday (1 December) filed or Chapter 11 bankruptcy, said yesterday that a US Bankruptcy Court in Texas had given the green light for it to access US$365m of its $450m debtor-in-possession financing (DIP) facility.
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The ruling will enable Pilgrim’s Pride to “satisfy its customary business obligations, including the timely payment of employee wages and payments to vendors”.
President and CEO Clint Rivers welcomed the court’s approval of Pilgrim’s Pride’s “first-day motions” calling the move “a positive first step toward a successful restructuring”.
River added: “We have been working hard to address the operational and financial challenges we currently face, and this restructuring will help us not only meet these challenges, but also enhance the efficiency of our operations, strengthen our balance sheet and position Pilgrim’s Pride to compete more effectively in the future.”
Pilgrim’s Pride’s move to file for Chapter 11 earlier this week followed a turbulent few months for the business. The company’s profits have been hit by soaring feed costs and weak poultry prices. The group’s high level of indebtedness, primarily the result of its takeover of Gold Kist last year, also proved problematic amid turmoil in the credit markets.
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By GlobalDataFollowing the filing of Pilgrim’s Pride’s Chapter 11 petitions, the company’s shares on the New York Stock Exchange have been suspended. Pilgrim’s Pride common stock is now quoted on the Pink Sheets Electronic Quotation Service.
The company added that some of its operations in the US and its business in Mexico were not included in the Chapter 11 filing and “continue to operate as usual”.
