Pilgrim’s Pride files plan to sell itself to a Brazilian beef producer JBS for $2.8 billion

Pilgrim’s Pride files reorganization plan to court

PITTSBURG, Texas — Chicken producer Pilgrim’s Pride Corp. said Friday it has submitted a bankruptcy reorganization plan to a judge, the first step to seek court approval for a sale of the company to Brazilian beef producer JBS SA.

The completion of the $2.8 billion deal, along with another one announced earlier this week, would make JBS the world’s biggest meat maker.

The Pittsburg, Texas-based chicken producer filed its plan and a plain-English explanation of it, called a disclosure statement, to a bankruptcy judge for approval. If Pilgrim’s Pride secures the court’s OK on the disclosure statement at an Oct. 20 hearing, it can begin to solicit yay or nay votes from creditors on the plan itself.

Under the plan, Pilgrim’s Pride proposes selling a 64 percent stake in the reorganized company to JBS for $800 million in cash.

The proceeds would be used to pay back in full the creditors holding valid claims.

The company’s existing stock would be wiped out, and owners of those shares would get shares in the new company that amount to a 36 percent stake.

The company also proposes taking a bankruptcy exit loan of $1.65 billion as part of its emergence plan.

The chicken producer was forced to file Chapter 11 last year, hobbled by debt and struggling to pay high feed costs. Its case is in the U.S. Bankruptcy Court in the Northern District of Texas.