Pilgrim's Pride granted third waiver on covenant

CHICAGO (Reuters) - Struggling U.S. chicken producer Pilgrim's Pride Corp PPC.N was granted a third waiver to meet its credit obligations, this time it has until December 1 to comply, sending it shares sharply higher.

"Pilgrim's Pride Corporation today announced that it has reached an agreement with its lenders to extend the temporary waiver under its credit facilities through noon (CDT) on December 1, 2008," the company said in a statement.

The five-day waiver until December 1 compares with the two previous waivers, which were each about a month long. It also has a $25.7 million interest payment due in early December.

"You would have to think there is some chance of the company surviving in some form," Paul Aho, economist at the consulting firm Poultry Perspective, said of the short waiver period. "Or this would have been the end of the game."

Pilgrim's Pride is the largest U.S. chicken company and second-largest in Mexico, but has been losing money for nearly a year because of high feed costs, low chicken prices, debt obligations and losses on grain hedges.

Its shares have lost nearly all of their value in recent months, dropping to 25 cents per share on November 14, from a yearly high of $29.59 on December 11, 2007.

Shares were up 58 cents, or 107 percent, at $1.12 on the New York Stock Exchange in early afternoon trade.

(Reporting by Bob Burgdorfer; editing by Leslie Gevirtz)