Pilgrim's Pride Sells 64% Stake to JBS

PITTSBURG, Texas (TheStreet) -- Pilgrim's Pride's(PGPDQ Quote) hobbled ... well ... pride may be nearing an end, as the troubled-chicken producer announced plans to sell a majority stake to Brazilian beef conglomerate JBS SA.

In a statement released Wednesday morning, Pilgrim's Pride said it entered into a deal to sell a 64% majority interest to JBS, the world's biggest beef producer, for $800 million in cash. The deal comes after weeks of buyout rumors and as part of a larger bankruptcy reorganization, paving the way for Pilgrim's Pride emergence, as the company anticipates, before the end of December.

After accumulating crushing debt loads and higher feed costs, Pilgrim's Pride filed for Chapter 11 protection last December. According to the company's statement today, revenue from the sale will be put to use funding distributions to creditors, either in cash or a note issuance. Existing shareholders will also receive shares representing a 36% interest in the reorganized operation. The plan also calls for a $1.75 billion exit facility.

"We believe our reorganization plan will pave the way for Pilgrim's Pride to emerge from bankruptcy before the end of the year, and mark a new beginning for this proud company, one that I fully support and endorse," Senior Chairman Lonnie "Bo" Pilgrim said. "While the past year has been a difficult time for everyone involved in our restructuring, I take pride in knowing that we have a plan in place to pay back our creditors in full and preserve a great deal of value for our existing stockholders."