Pilgrim's Pride Corp. on Wednesday announced that the company will sell 64 percent of its new common stock to JBS S.A. for $800 million in cash, according to Meatingplace.com The action takes place under a reorganization plan filed under Chapter 11 bankruptcy.
The overall transaction, which JBS S.A. is executing through its JBS USA Holdings Inc., represents an enterprise value of some $2.8 billion. If approved, the deal would make JBS USA a direct rival to Tyson Foods, currently the only major U.S. meat company to produce beef, pork and poultry.
Pilgrim's said in a statement that proceeds from the sale will be used to fund cash distributions to creditors in cash or new notes. Meanwhile, existing shareholders will own 36 percent of the reorganized firm. Pilgrim's expects to emerge from bankruptcy before the end of December, a year after it originally filed for Chapter 11 protection.
"Thanks to the shared commitment and hard work of our employees, we believe that Pilgrim's Pride is positioned to emerge from bankruptcy as a stronger, more efficient competitor," Pilgrim's President and chief executive officer Don Jackson said. "We have returned to profitability, the quality of our asset base has improved significantly and we are gaining additional business.
You can view the company news release on line.