"This amendment will provide Pilgrim's with financial flexibility to meet the challenges posed by continued volatility in the grain markets and weak pricing for chicken in the domestic market," said Bill Lovette, president and chief executive officer. "We took this proactive step to demonstrate to our stakeholders that Pilgrim's has the support of our bank group and JBS USA as we work to improve our business and operations."
The amendment suspends the existing fixed-charge coverage covenant and the senior secured debt covenant until the fourth quarter of fiscal year 2012. The amendment also sets certain financial covenant levels at terms more favorable to the company. Following the suspension period, the financial covenants will be calculated under amended terms of the credit facility. In addition, JBS USA Holdings, the majority equity holder in Pilgrim's, has agreed to provide a $50 million subordinated loan in support of the company.