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and animal feed industries.
on September 18, 2009

Pilgrim's Pride files reorganization plan with US Bankruptcy Court

Disclosure statement hearing is scheduled for Oct. 20, 2009

Pilgrim's Pride and six of its subsidiaries (debtors and debtors in possession) have officially filed a joint plan of reorganization and disclosure statement under Chapter 11 of the Bankruptcy Code.

As previously reported, Pilgrim's Pride and JBS have agreed to a transaction representing an enterprise value of approximately $2.8 billion, where Pilgrim's will sell 64% of its common stock to JBS for $800 million in cash.

The disclosure statement hearing is scheduled for Oct. 20, 2009, before the Bankruptcy Court. If the Bankruptcy Court determines the proposed disclosure statement provides adequate information to vote on the plan, then the statement and plan, along with the appropriate ballots, will be sent to shareholders to vote on the plan. Since the proposed plan of reorganization represents a 100% plan, with creditors being repaid in full, shareholders represent the only impaired class and will be the only group entitled to vote on the plan of reorganization.

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 terms of the plan, all creditors of the debtors holding allowed claims will be paid in full. All existing Pilgrim's Pride common stock will be cancelled 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 at least $1.65 billion.

Read about how JBS will impact the U.S. poultry industry.

Read the JBS/Pilgrim's news story with commentary from Paul Aho.

Read the original buyout announcement.

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