PITTSBURGH, Texas - PITTSBURGH, Texas (AP) — Chicken producer Pilgrim's Pride Corp. said Monday that it has emerged from bankruptcy protection and will soon be part of the world's largest meat producer.
The company filed for Chapter 11 bankruptcy protection more than a year ago after it was unable to cope with mounting debt, low chicken prices and rising feed costs.
Pilgrim's Pride continued to operate while under bankruptcy protection but underwent major changes — shuttering plants, cutting thousands of jobs and shedding production to improve its financial position.
The U.S. Bankruptcy Court in the Northern District of Texas approved a reorganization plan for the company earlier this month.
Under the plan, the company it is selling a 64 percent stake in the company, worth $800 million, to Brazilian beef giant JBS.
JBS is also on track to buy Bertin SA, one of Latin America's largest producers and exporters of milk products, beef and leather. The two deals combined would bump Tyson Foods from the top slot in the industry.
The influx of cash to Pilgrim's Pride from the JBS deal and savings found during restructuring let the company repay its creditors in full — an unusual outcome in a corporate bankruptcy, as creditors aren't often repaid.
Even stockholders, generally left out in the cold in a bankruptcy, are getting something. Pilgrim's Pride, based in Pittsburgh, Texas, is redistributing shares not being sold to JBS to current stockholders.
Pilgrim's Pride president and CEO said in a statement Monday that the company is beginning a new chapter as a stronger organization.
"We fixed the darn company, we didn't just reshuffle the balance sheet," said William Snyder of CRG Partners, who worked as the chief restructuring officer for the deal. "That's why it's an extraordinary result."
The deal could also heighten competition in a consolidating meat industry, which has been weathering a downturn brought on by volatile feed costs, oversupply and a slump in demand.
Pilgrim's Pride had been the country's largest chicken producer, with about 23 percent of the market, before it filed for bankruptcy protection last year. JBS operates largely in pork and beef products and the combination will broaden the reach and increase stability for both companies.
The reorganized company's stock will begin trading Tuesday under the ticker symbol "PPC."