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Pilgrim's drums up $200 million in rights offering, JBS to pay short-term debt
Story Date: 3/5/2012
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Source: Bob Moser, MEATINGPLACE, 3/2/12
US-based poultry processor Pilgrim's Pride raised US$200 million for it and parent company JBS SA in a rights offering of 44.4 million new shares to current stockholders, the company said Thursday.
Following the offering announcement on Dec. 8, the shares were sold at a discount of 28 percent over the New York closing price from Wednesday. JBS USA, a subsidiary of JBS' holding company, bought the maximum number of shares it was entitled to, the company said.
This marks the second successful issuance of shares by JBS in the last three months. Brazilian processor JBS SA raised US$200 million in December by selling a similar number of shares, and said the company's goal was to pay down short-term debt.
Pilgrim's Pride's losses in 2011 dragged down what would have otherwise been a positive year for JBS SA. For the full year, Pilgrim's posted a loss of US$496.8 million, as the industry dealt with overproduction in the first half and weak chicken prices
JBS, the world's largest beef processor, bought Pilgrim's Pride in 2009 for US$800 million.
JBS SA said on Jan. 18 it was planning to issue US$400 million in bonds through subsidiaries JBS USA and JBS USA Finance Inc. Revenue from the bonds, which would expire in 2020, will go towards short-term debt payment for the company.
These recent moves by JBS earned the company a “BB” rating from Standard & Poor's in late January, which the agency said reinforces its stable outlook for JBS.
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