US meat producer Smithfield announced today (25 June) that it intends to raise capital through a notes offering and new loan facilities. The funds will be used to pay down debt and for other “general corporate purposes”.
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Smithfield said it is initiating an offering of US$500m senior secured notes, due 2014.
The notes will be offered and sold to qualified institutional buyers and will be guaranteed by substantially all of the US subsidiaries of the company.
Smithfield has also begun arranging a new US$1bn asset-based credit facility, which will replace the company’s existing revolving credit facility and will include an option to increase available commitments to US$1.3bn.
In addition to this, the company is currently negotiating a new US$200m loan, expected to mature in 2013.
Smithfield’s profitability has been hit by record feed costs and expenses associated with its restructuring programme over the past 12-months. Earlier this month, the company posted a net loss of US$190.3m for fiscal 2008, against net income of US$128.9m a year ago.
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