Pilgrim's Pride not seeking bankruptcy protection

Oct 17 (Reuters) - Loss-making Pilgrim's Pride Corp PPC.N, the world's largest chicken producer, said on Friday it did not expect to file for bankruptcy protection, and was focusing on a plan to address its problems.

Company spokesman Gary Rhodes told Reuters in an email that the company had "been working hard to develop a comprehensive business plan for the months ahead" and that this plan would help it meet "the financial and operational challenges ... currently facing Pilgrim's Pride and the broader industry."

"At the same time, we are continuing to explore opportunities to refinance and recapitalise our business, and to find ways to operate more efficiently," he said.

Rhodes's email followed a Wall Street Journal article citing sources who said Pilgrim's Pride could be forced to seek bankruptcy protection if it failed to raise money or extract concessions from its lenders.

Such a filing could be used to help expedite a sale of the company, two people familiar with the matter told the Journal, adding that the two potential suitors for the company were Tyson Foods Inc (TSN.N) and Mexican chicken and egg producer Industrias Bachoco SA de CV (IBA.N).

Last month Pilgrim's Pride said it would post a significant fourth-quarter loss and that it expected to be in breach of a credit covenant. It later said it had received a temporary waiver on the covenant and appointed advisers to review its operations and refinancing strategy.

Pilgrim's Pride has until Oct. 28 to negotiate a deal with lenders, the Journal said, adding that a $25.7 million bond payment was also due next month.

The Journal's two sources said Pilgrim's Pride was also considering selling assets, including its Mexican operations, various poultry plants and some real estate, but no decisions had been made.

Tyson Foods and Industrias Bachoco did not return calls made by Reuters seeking comment.

The chicken industry has suffered this year due to high prices for feed and fuel, while ample meat supplies and cash-strapped consumers have prevented companies from raising prices enough to cover higher costs.

Pilgrim's Pride has struggled more than most, in part because of $1.5 billion in long-term debt it took on after its January 2007 purchase of smaller rival Gold Kist Inc.

To cope, the company has closed plants and cut production.

Shares in the company have lost more than 84 percent of their value in the last six months. (Reporting by Shradhha Sharma in Bangalore, editing by Will Waterman)