UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date of
report (Date of earliest event reported): February 26,
2009
PILGRIM'S
PRIDE CORPORATION
(Exact
Name of Registrant as Specified in its Charter)
Delaware 1-9273 75-1285071
(State
or Other
Jurisdiction (Commission (IRS
Employer
of
Incorporation) File
Number)
Identification No.)
4845 US Highway 271 N.
Pittsburg,
Texas 75686-0093
(Address of Principal Executive
Offices) (ZIP
Code)
Registrant's
telephone number, including area code: (903) 434-1000
Not
Applicable
(Former
Name or Former Address, if Changed Since Last Report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
q Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
q Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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q
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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q
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
1.01. Entry into a Material Definitive Agreement.
On
February 26, 2009, Pilgrim's Pride Corporation (the "Company") entered into a
First Amendment (the "Amendment")
to Amended and Restated Post-Petition Credit Agreement dated December 31,
2008 among the Company, as borrower, certain
subsidiaries of the Company, as
guarantors, Bank of Montreal, as agent, and the lenders party
thereto (the "Credit
Agreement"). The
Amendment amends the definition of "EBITDAR" in the Credit Agreement to include, and permit the Company to incur, certain
costs and charges, not to exceed $35 million, related to the idling of
the Company's processing plants in Douglas, Georgia, El Dorado, Arkansas and
Farmerville, Louisiana.
The above
discussion is a summary of certain terms and conditions of the Amendment and is
qualified in its entirety by the terms and conditions of the Amendment. For the
complete terms and conditions of the Amendment summarized in this report, please
refer to the Amendment attached hereto as Exhibit 10.1 and incorporated by
reference herein.
Item
2.05 Costs Associated with Exit or Disposal Activities.
On
February 26, 2009, officers of the Company determined to implement a plan to
idle the Company's Douglas, Georgia, El Dorado, Arkansas, and Farmerville,
Louisiana chicken processing plants and to consolidate its protein salad
production from its Franconia, Pennsylvania facility to its processing facility
in Moorefield, West Virginia. The Company expects to complete these
actions by mid-May, 2009. The idling of the three underperforming plants is
intended to improve the Company's product mix by reducing commodity production
and to significantly reduce costs in the midst of an industry-wide oversupply of
chicken and weak consumer demand resulting from a national
recession.
The
Company expects to incur one-time, pre-tax restructuring charges of
approximately $35 million, before any potential asset impairment charges. The
Company expects to incur approximately $7 million in employee severance costs,
with the remainder of the charges related to idling the facilities, including
cleanup and equipment relocation costs, inventory charges, certain insurance
reserves and potential lease termination costs. This total includes
approximately $8 million of estimated non-cash restructuring
costs. The Company is currently assessing whether or not it will
incur any impairment charge associated with these actions. Upon
completion of the restructuring actions noted above, pre-tax charges that are
expected to result in cash expenditures are expected to be approximately $27
million.
Item
9.01. Financial
Statements and Exhibits.
(d) Exhibits.
Exhibit
Number Description
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10.1
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First
Amendment to Amended and Restated Post-Petition Credit Agreement, dated as
of February 26, 2009, among
the Company, as borrower, certain subsidiaries of the Company, as guarantors, Bank of Montreal,
as agent, and the lenders party
thereto.
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Signatures
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
PILGRIM'S PRIDE CORPORATION
Date: March
4,
2009 By: /s/ Richard A.
Cogdill
Richard A. Cogdill
Chief Financial Officer, Secretary and Treasurer
EXHIBIT
INDEX
Exhibit
Number Description
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10.1
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First
Amendment to Amended and Restated Post-Petition Credit Agreement, dated as
of February 26, 2009, among
the Company, as borrower, certain subsidiaries of the Company, as guarantors, Bank of Montreal,
as agent, and the lenders party
thereto.
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DALDMS/657853.3
Exhibit
10.1
Pilgrim’s
Pride Corporation
First
Amendment To Amended and Restated Post-Petition Credit Agreement
This
First Amendment to Amended and Restated Post-Petition Credit Agreement (herein,
the “Amendment”) is
entered into as of February 26, 2009, among Pilgrim’s Pride Corporation, a
Delaware corporation (the “Borrower”), as debtor and
debtor-in-possession in a case pending under Chapter 11 of the Bankruptcy
Code, the direct and indirect Domestic Subsidiaries of the Borrower party to
this Amendment and To-Ricos, Ltd., a Bermuda company (“To-Ricos”) and To-Ricos
Distribution, Ltd., a Bermuda company (“To-Ricos Distribution”), as
Guarantors, each as debtor and debtor-in-possession in a case pending under
Chapter 11 of the Bankruptcy Code, the Lenders party hereto, and Bank of
Montreal, a Canadian chartered bank acting through its Chicago
branch, as DIP Agent for the Lenders.
Preliminary
Statements
A. The
Borrower, the Guarantors from time to time parties thereto, the Lenders and the
DIP Agent are parties to that certain Amended and Restated Post-Petition Credit
Agreement dated as of December 31, 2008 (the “Credit
Agreement”). All capitalized terms used herein without
definition shall have the same meanings herein as such terms have in the Credit
Agreement.
B. The Borrower
and the Lenders have agreed to amend the Credit Agreement on the terms and
conditions set forth in this Amendment.
Now, Therefore, for
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
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Section 1. Amendments
To Credit Agreement.
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Upon satisfaction of
all of the conditions precedent specified in Section 2 hereof the Credit
Agreement shall be amended as follows:
Section 1.1.
The definition of “EBITDAR” in Section 5.1
of the Credit Agreement shall be amended by the insertion of a new
clause (g) immediately following the existing clause (f), as
follows:
“, and
(g) Closure Costs in an aggregate amount not to exceed $35,000,000
,”
Section 1.2.
Section 5.1 of the Credit Agreement shall be amended by adding the
following definition thereto in alphabetical order:
-1-
“Closure Costs” means, with
respect to the Douglas, Georgia complex, the El Dorado, Arkansas complex and the
Farmerville, Louisiana complex, any costs consisting of lease termination costs,
severance costs, facility shutdown costs and other related restructuring
expenses, costs and charges relating to or associated with the closure of such
complexes.
Section 1.3.
Schedule I attached to the form of Compliance Certificate attached
to the Credit Agreement as Exhibit F shall be replaced by
Schedule I attached to this Amendment.
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Section 2. Conditions
Precedent.
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The
effectiveness of this Amendment is subject to the satisfaction of all of the
following conditions precedent:
Section 2.1.
The Borrower, the Guarantors and the Required Lenders shall have executed
and delivered this Amendment .
Section 2.2.
Each of the representations and warranties set forth in Section 6 of
the Credit Agreement shall be true and correct in all material respects, except
to the extent the same expressly relate to an earlier date in which case they
shall remain true and correct in all material respects as of such earlier
date.
Section 2.3.
The Borrower shall be in full compliance with all of the terms and
conditions of the Credit Agreement and no Event of Default or Default shall have
occurred and be continuing thereunder or shall result after giving effect to
this Amendment.
Section 2.4.
The Bankruptcy Court shall have entered an order authorizing the
execution and delivery of this Amendment.
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Section 3.
Representations And Warranties.
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Section 3.1.The
Borrower, by its execution of this Amendment, hereby certifies and warrants the
following:
(a)each of the
representations and warranties set forth in Section 6 of the Credit Agreement is
true and correct in all material respects as of the date hereof, except to the
extent the same expressly relate to an earlier date in which case they shall
remain true and correct in all material respects as of such earlier date;
and
(b)the Borrower is in
full compliance with all of the terms and conditions of the Credit Agreement and
no Event of Default or Default has occurred and is continuing
thereunder.
-2-
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Section 4.
Miscellaneous.
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Section 4.1.
Except as specifically amended herein the Credit Agreement shall continue
in full force and effect. Reference to this specific Amendment need
not be made in any note, documents, letter, certificate, the Credit Agreement
itself, the Notes, or any communication issued or made pursuant to or with
respect to the Credit Agreement or the Notes, any reference to the Credit
Agreement being sufficient to refer to the Credit Agreement as amended
hereby.
Section 4.2.
As an additional inducement to and in consideration of the Lenders’
acceptance of this Amendment each of the Guarantors hereby acknowledges the
execution of the foregoing Amendment by the Borrower and agrees that this
acknowledgement is not required under the terms of the Guaranty and that the
execution hereof by the Guarantors shall not be construed to require the Lenders
to obtain their acknowledgement or consent to any future amendment, modification
or waiver of any term of the Credit Agreement except as otherwise provided in
the Guaranty. Each of the Guarantors hereby agree that the Guaranty
shall apply to all indebtedness, obligations and liabilities of the Borrower and
the Guarantors to the Lenders under the Credit Agreement as amended by this
Amendment. Each Guarantor further acknowledges and agrees that the
Guaranty shall be and remain in full force and effect.
Section 4.3.
This Amendment may be executed in any number of counterparts, and by the
different parties on different counterparts, all of which taken together shall
constitute one and the same Agreement. Any of the parties hereto may
execute this Amendment by signing any such counterpart and each of such
counterparts shall for all purposes be deemed to be an original. This
Amendment shall be governed by the internal laws of the State of
Illinois.
[Signature
pages to follow]
-3-
This
First Amendment to Amended and Restated Post-Petition Credit Agreement is
entered into as of the date and year first above written.
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“Borrower”
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Pilgrim’s
Pride Corporation, as debtor and
debtor-in-possession
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By:
/s/ Richard A.
Cogdill
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Name:
Richard A.
Cogdill
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Title:
Chief Financial
Officer, Secretary andTreasurer
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“Guarantors”
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PFS
Distribution Company, as debtor and
debtor-in-possession
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By:
/s/ Richard A.
Cogdill
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Name:
Richard A.
Cogdill
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Title:
Chief Financial
Officer, Secretary andTreasurer
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PPC
Transportation Company, as debtor and
debtor-in-possession
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By:
/s/ Richard A.
Cogdill
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Name:
Richard A.
Cogdill
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Title:
Chief Financial
Officer, Secretary andTreasurer
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Pilgrim’s
Pride Corporation of West Virginia, Inc., as debtor and
debtor-in-possession
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By:
/s/ Richard A.
Cogdill
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Name:
Richard A.
Cogdill
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Title:
Chief Financial
Officer, Secretary andTreasurer
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PPC
Marketing, Ltd., as debtor and
debtor-in-possession
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By:
/s/ Richard A.
Cogdill
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Name:
Richard A.
Cogdill
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Title:
Chief Financial
Officer, Secretary andTreasurer
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To-Ricos,
Ltd., as debtor and
debtor-in-possession
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By:
/s/ Richard A.
Cogdill
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Name:
Richard A.
Cogdill
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Title:
Chief Financial
Officer, Secretary andTreasurer
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To-Ricos
Distribution, Ltd., as debtor and
debtor-in-possession
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By:
/s/ Richard A.
Cogdill
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Name:
Richard A.
Cogdill
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Title:
Chief Financial
Officer, Secretary andTreasurer
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“DIP
Agent, Swing Line Lender and
L/C Issuer”
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Bank
of Montreal, as a Lender, Swing Line Lender, L/C Issuer and as DIP
Agent
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By:
/s/ Barry W.
Stratton
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Name:
Barry W.
Stratton
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Title:
Senior Vice
President
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“Lenders”
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Cooperatieve
Centrale Raiffeisen-Boerenleenbank B.A. “Rabobank
Nederland” New York Branch
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By:
/s/ Richard J.
Beard
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Its:
Executive
Director
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By:
Rebecca
Morrow
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Its:
Executive
Director
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U.S.
Bank National Association
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By:
/s/ Dale L.
Welke
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Its:
Vice
President
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Wells
Fargo Bank National Association
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By
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Its
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ING
Capital LLC
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By:
/s/ Bill
Redmond
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Its:
Managing
Director
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By
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Its
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CALYON
New York Branch
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By:
/s/ Mark
Koneval
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Its:
Managing
Director
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By:
Alan
Sidrane
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Its:
Managing
Director
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Natixis
New York Branch
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By:
/s/ Stephen A.
Jendras
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Its:
Managing
Director
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By:
/s/ Alisa
Trani
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Its:
Associate
Director
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SunTrust
Bank
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By:
Janet R.
Naifeh
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Its:
Senior Vice
President
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First
National Bank of Omaha
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By
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Its
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Schedule I
to
Compliance Certificate
Pilgrim’s
Pride Corporation, as debtor and debtor-in-possession
Compliance
Calculations
for
Amended and Restated Post-Petition Credit Agreement dated as of
December 31, 2008, as amended
Calculations
as of _____________, _______
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A.Capital Expenditures (Section
8.22(a))
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1.Period-to-date
Capital Expenditures
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$
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___________
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2.Maximum
permitted amount
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$
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150,000,000 | ||
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3.The
Borrower is in compliance (circle yes or no)
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yes/no
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B.Minimum EBITDAR
(Section 8.22(b))
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1.Net
Income for past 3 fiscal months
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$
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___________
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2.Interest
Expense for past 3 fiscal months
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$
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___________
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3.Income
taxes for past 3 fiscal months
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$
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___________
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4.Depreciation
and Amortization Expense for past 3 fiscal months
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$
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___________
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5.Asset
impairment charges and restructuring costs consisting of professional fees
and expenses for past 3 fiscal months
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$
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___________
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6.Losses
realized upon asset sales for past 3 fiscal months
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$
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___________
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7.Write-downs
of goodwill or other intangibles for past 3 fiscal months
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$
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___________
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8.Closure
Costs with respect to the Douglas, Georgia, El Dorado, Arkansas and
Farmerville, Louisiana complexes for past 3 fiscal months
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$
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___________
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9.Gains
realized upon asset sales for past 3 fiscal months
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$
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___________
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10.Sum
of lines B1 through B8 minus Line B9 (EBITDAR)
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$
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___________
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11.Minimum
required amount
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$
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___________
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12.The
Borrower is in compliance (circle yes or no)
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yes/no
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