Knobias Clip Report (09-25-2008) PPC
Submitted By Knobias ClipReport
PPC: Notifies Lender That it Expects Significant Loss in Q4
By Fain Hughes, fhughes@knobias.com
Pilgrim’s Pride Corporation (PPC) announced that, based on preliminary results, it notified its lenders that the Company expects to report a significant loss in the fiscal fourth quarter ending September 27, 2008. The Company attributed the anticipated loss to high feed-ingredient costs, continued weak pricing and demand for breast meat, and the significant negative impact of hedged grain positions during the quarter.
As a result of this expected loss, the Company does not expect to be in compliance with its fixed-charge coverage ratio covenant under its principal credit facilities as of the fiscal year ending September 27, 2008, but expects to be in compliance with all other covenants as of the end of the 2008 fiscal year.
Pilgrim’s Pride also announced that it believes it has reached an understanding with the agents under its credit facilities to temporarily waive the fixed-charge coverage ratio covenant through October 28, 2008, and to provide continued liquidity under these facilities during this same period.
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