PITTSBURG, TEXAS — Pilgrim's Pride Corporation and six of its subsidiaries that are debtors and debtors in possession in the chapter 11 cases pending in the U.S. Bankruptcy Court for the Northern District of Texas announced on Sept. 18 that they have filed a joint plan of reorganization and disclosure statement under chapter 11 of the Bankruptcy Code.
On Sept. 16, Pilgrim's Pride and JBS S.A. revealed they had agreed to a transaction representing an enterprise value of approximately $2.8 billion. According to the reorganization plan terms, Pilgrim's Pride has entered into an agreement to sell 64% of the new common stock of the reorganized Pilgrim's Pride to JBS S.A., through its JBS USA Holdings Inc. subsidiary, for $800 million in cash.
Proceeds from the sale of the new common stock of the reorganized Pilgrim's Pride to JBS will be used to fund cash distributions to allowed claims under the plan. All creditors of the debtors holding allowed claims will be paid in full, under the terms of the plan. All existing Pilgrim's Pride common stock will be canceled and existing stockholders will receive the same number of new common stock shares, representing 36% of the reorganized Pilgrim's Pride in aggregate.
An exit facility for senior secured financing in an aggregate principal amount of at least $1.65 billion is also called for under the plan.
The disclosure statement hearing is currently scheduled to take place on Oct. 20 at 10:30 a.m. CT before the bankruptcy court. If the bankruptcy court determines the proposed disclosure statement provides adequate information to vote on the plan, then the proposed disclosure statement and plan, along with the appropriate ballots, will be sent to shareholders to vote on the plan, the company relays.
Since the proposed plan of reorganization represents a "100% plan," with creditors being repaid in full, shareholders represent the only impaired class and will be the only group entitled to vote on the plan of reorganization.