Bankruptcy or Sale Seems Likely for Pilgrim's Pride

(MoneyWatch)  As commodity prices rose, Pilgrim's Pride got hurt. The chicken processor got hurt again as commodity prices fell, because it lost money on hedging against further rises.

As a result of that, and of problems in the marketplace and its heavy debt load, some analysts are saying the company is in danger of going bankrupt.

On Tuesday, the company's shares fell by more than 34 percent, to $1.35. The company's decision last year to buy rival Gold Kist was a big loser. Pilgrim's Pride took on $1.5 billion in long-term debt. This week, the company reached agreement with lenders to stay in technical compliance.

But that will last only until Nov. 26, and that might not be enough, and the company hasn't been able to refinance its debt.

Executives insists that it's unlikely that Pilgrim's Pride will have to file for bankruptcy, but it's hard to see, sans a very quick and very unlikely turnaround or a sale of the company, how it could be avoided.
Forbes reports Deutsche Bank analyst Christina McGlone saying: "Essentially, Pilgrim's Pride as we know it today will cease to exist."