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  • buck_turdgeson buck_turdgeson Jul 15, 2013 1:50 PM Flag

    WSJ: AgFeed files Ch. 11

    Anyone care to opine what this means wrt ongoing prospects?

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    • Only US assets are part of BK. But trying to sell China assets:

      Hog producer AgFeed Industries Inc. FEED +20.00% filed for Chapter 11 bankruptcy protection on Monday after agreeing to wind down its supply contract with its main U.S. customer, Hormel Foods Corp., HRL +0.57% which purchases weanling pigs and hogs from the company.

      AgFeed plans to sell its U.S. operations while under Chapter 11 protection. It also is looking for a buyer for its Chinese units, which aren't included in the U.S. bankruptcy case.

      The Hendersonville, Tenn., company has lined up a $79 million leading bid for most of its U.S. assets from Maschhoffs LLC, a Carlyle, Ill., hog production network, according to papers filed with the U.S. Bankruptcy Court in Wilmington, Del. The offer, which is subject to court approval, would be tested at a court-supervised auction.

      The company's U.S. operations brought in $244 million in revenue in 2012, according to court papers.

      The company has been involved in a dispute with Hormel that led to an arbitration award of $7.9 million against AgFeed earlier this year. This decision spurred an event of default under the company's $68.5 million credit facility, which matured in February and hasn't yet been repaid.

      AgFeed and Hormel have since reached a settlement and have agreed to wind down their business relationship by the end of the year. In 2012, the company supplied more than 1.3 million hogs to Hormel's processing facilities in Austin, Minn., and Fremont, Neb., according to court papers.

      In January of last year, AgFeed determined it would need to restate financial statements going back to 2007 after a special-committee probe into accounting issues at its animal nutrition and legacy farm hog operations in China. It named Keith A. Maib of turnaround firm Mackinac Partners as chief restructuring officer in May.

      AgFeed said it has been "actively marketing" its Chinese assets but hasn't yet reached a deal with a potential buyer.


    • - It means they are going to sell US assets
      - It means they are trying to sell China assets. (it will happen)
      - Any money left after debts, will paid out.
      - Lawsuits go away as there is nothing left to sue for

    • party's not over yet....until they find a buyer for the china assets.

      Sentiment: Hold

    • Increases the risk for Ch. 7... slim chances that we will be issued new shared of the new company if they emerge from bankruptcy... of course the executive team is still getting paid...