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Pilgrim's Pride Announces Rights Offering

21 December 2011, at 8:59am

US - Pilgrim's Pride is to launch a rights issue for up to approximately 44.44 million shares of common stock to its stockholders.

Under the expected rights offering, each stockholder would receive, at no charge, non-transferable rights to buy shares of Pilgrim's Pride common stock at a subscription price of $4.50 per share, representing a five discount.

The issue is expected to raise $200 million.

Stockholders will be able to buy their respective pro rata portions of the shares offered based on their ownership as of the record date for the rights offering.

Stockholders who fully exercise their rights will be entitled to subscribe for and purchase, subject to certain limitations and subject to allotment, additional shares that remain unsubscribed for as a result of any unexercised rights.

JBS USA Holdings, Inc., the Company's majority stockholder, said it intends to buy from the Company, at the subscription price, its pro rata share of the common stock to be offered and any unsubscribed for shares to ensure the $200 million target is reached.

The Company intends to file with the Securities and Exchange Commission a registration statement covering the rights offering, and the distribution of the rights and commencement of the offering will occur promptly following the effectiveness of the registration statement.

The expiration of the rights offering is expected to occur during the first quarter of 2012.

JBS has also reported certain financial structure changes to the SEC.

The company said that on completion of the offering and as part of amendments to the CoBank Credit Facility, JBS will no longer be obligated to make a loan of $50 million to Pilgrims Pride and Pilgrims Pride is permitted to make pre-payment JBS of principal and interest on the loan of $50 million provided by JBS in June 2011.

JBS SA said it believes that these financial changes Pilgrim's and the registration of the Offer Shares will strengthen the Company's financial position in early 2012, a prospect of recovery of the poultry industry in the US, with exports in continuous expansion and the beginning of recovery in domestic consumption.