September 16, 2009

Smithfield Foods Inc. said it plans to sell US$250 million in stock to strengthen its balance sheet and perhaps retire debt.

The company's current market capitalisation is US$2 billion.

Shares fell 3.9 percent, to US$13.75, in after-hours trading. The stock has lost more than a third of its value in the past year.

Proceeds from the offering also will go toward working capital and general corporate purposes.

Companies in many sectors have been turning to the equity markets in recent months to raise capital.

Smithfield, the largest US pork-products producer, has posted losses in four of the past five quarters because of high feed costs and lower demand. One reason for the drop in demand is the sector's association with the AH1N1 virus, also called swine flu, although the disease has not been linked to animals.