October 2, 2008 


Pilgrim's Pride receives reprieve from creditors


Pilgrim's Pride Corp. announced that it has reached a definitive written agreement with its lenders to waive its fixed-charge coverage ratio covenant under its credit facilities until Tuesday, 28 October 2008.


The Pittsburg, Texas-based company warned last week that a failure to receive a waiver of its covenant would permit its lenders to declare an event of default.


The company expects to report a significant loss in its fourth quarter earnings and has enlisted Lazard, an advisory investment bank to gain strategic advice regarding refinancing and recapitalization opportunities. It has also agreed to work with Bain Corporate Renewal Group on various strategic issues, including operational improvement.


In a note to investors, Kenneth B. Zaslow of BMO Capital Markets predicted that in order to resolve the "Great Chicken Crisis of 2008," banks will need to put together a type of resolving plan for companies such as Pilgrim's Pride, or even the whole industry, which involves reconfiguring debt and selling certain assets.

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