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China’s AgFeed to sell U.S. hog operations; files Chapter 11
Story Date: 7/17/2013
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Source: Rita Jane Gabbett, MEATINGPLACE, 7/16/13
Hendersonville, Tenn.-based AgFeed USA, a unit of Chinese hog production giant AgFeed Industries, plans to sell its assets to Carlyle, Ill.-based The Maschoffs LLC while under Chapter 11 bankruptcy protection, the company announced in a filing with the Securities and Exchange Commission.
AgFeed USA’s direct and indirect subsidiaries include: M2P2 General Operations, LLC; Midwest Finishing LLC; Genetics Operating LLC; Pork Technologies, L.C.; New Colony Farms LLC; Heritage Farms LLC; MGM, LLC; TS Finishing, LLC; New York Finishing, LLC; M2P2 Facilities, LLC; Heritage Land, LLC; New Colony Land Company, LLC; Genetics Land, LLC; and M2P2 AF JV, LLC.
The company expects to receive total cash proceeds of $79 million, subject to reduction for changes in working capital and he assumption of certain liabilities.
According to the Wall Street Journal, AgFeed this year agreed to wind down its business relationship with Hormel after agreeing to pay Hormel $7.9 million to settle a dispute. The agreement resulted in AgFeed defaulting on its $68.5 million credit facility in February. According to court documents, in 2012, the company supplied more than 1.3 million hogs to Hormel's processing facilities.
At the same time, parent AgFeed Industries and its financial advisors “are continuing to actively pursue competing offers for AgFeed USA, sales of the company’s Chinese subsidiaries and assets as well as the sellers’ remaining assets, primarily comprised of the sellers’ sow farm operations in Oklahoma,” according to the SEC filing.
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