Pilgrim's Pride explores strategic alternatives, possible refinancing

By Angela McDaniels

Tacoma, Wash., Sept. 29 - Pilgrim's Pride Corp. said it retained Bain Corporate Renewal Group to work with management on a range of strategic issues and operational improvement.

The company also hired Lazard as its investment banker to provide strategic advice regarding refinancing and recapitalization opportunities, according to a company news release.

The announcement follows the company's disclosure that it expects to report a significant loss in the fourth quarter of fiscal 2008, which ended Sept. 27.

Pilgrim's Pride attributed the anticipated loss to high feed-ingredient costs, continued weak pricing and demand for breast meat and the significant negative impact of hedged grain positions during the quarter.

The company does not anticipate any significant hedging gains or losses beyond the fourth quarter on the few positions that remained open past the end of that period, the release stated.

Pilgrim's Pride also reached an agreement with its lenders on Friday to waive the fixed-charge coverage ratio covenant under is credit facilities and receivables purchase agreement through Oct. 28. The lenders will continue to provide liquidity under these credit facilities during the 30-day waiver period.

Pilgrim's Pride is a Pittsburgh-based poultry producer.

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