Pilgrim’s Pride will file plan of reorganization

Pilgrim’s Pride Corporation and six of its subsidiaries that are debtors and debtors in possession in the Chapter 11 cases pending in the United States Bankruptcy Court for the Northern District of Texas will be filing a joint plan of reorganization and disclosure statement under Chapter 11.

Sept. 16, 2009

2 min read

Pilgrim’s Pride and JBS have agreed to a transaction representing an enterprise value of approximately $2.8 billion. Under terms of the plan of reorganization, Pilgrim’s Pride has entered into an agreement to sell 64% of the new common stock of the reorganized Pilgrim’s Pride to JBS SA, through its JBS USA Holdings Inc subsidiary for $800 million in cash.

Proceeds from the sale of the new common stock of the reorganized Pilgrim’s Pride to JBS will be used to fund cash distributions to allowed claims under the plan. Under the plan, all creditors of the debtors holding allowed claims will be paid in full, either in cash or by issuance of a new note. All existing Pilgrim’s Pride common stock will be canceled and existing stockholders will receive the same number of new common stock shares representing 36% of the reorganized Pilgrim’s Pride in aggregate.

The plan also calls for an exit facility for senior secured financing in an aggregate principal amount of $1.75 billion to be provided by a group of lenders arranged by Joint Lead Arrangers CoBank, ACB, and Rabobank.

Pilgrim’s Pride said it anticipates the plan to be confirmed by the bankruptcy court in time for the debtors to emerge from bankruptcy before the end of December 2009.

Information about Pilgrim’s Pride’s restructuring is available at www.pilgrimspride.com or by calling (888) 830-4659.

Pilgrim’s Pride employs approximately 41,000 people and operates chicken processing plants and prepared-foods facilities in 12 states, Puerto Rico, and Mexico.

JBS SA is a leading beef producer and exporter and a top global exporter of processed beef. The company’s operations include 25 plants in nine Brazilian states and six plants in four Argentine provinces; in addition to 16 plants in the United States, 10 in Australia, and eight in Italy. Additionally, JBS SA is the third-largest pork producer in the United States.