Tyson Foods secures $1 billion credit line; poultry lawsuit hits speed bump
by March 9, 2009 6:15 pm 100 views
Who says Mondays are bad?
Springdale-based Tyson Foods announced Monday it has secured a $1 billion line of credit with JPMorgan Chase Bank that gives the world’s largest meat processor and distributor some breathing room in what is a challenging time for the industry.
Springdale-based Tyson Foods Inc. reported Jan. 26 a net income loss of $112 million in its first fiscal quarter of 2009 (for the 90-period ended Dec. 27). The negative quarter continues a decline in earnings that saw the company’s net income for fiscal year 2008 ($86 million) decline 67.9% compared to fiscal 2007.
Collateral for the line of credit includes Tyson Food’s cash, accounts receivable, inventory and all of the company’s material assets. In other words, the entire company was put up as collateral.
“Given the current financial market, we believed it was prudent for us to proceed with these measures now,” Dennis Leatherby, executive vice president and chief financial officer for Tyson Foods, noted in a press release. “The offering and new credit facility provide Tyson with continued financial flexibility, giving us the option of paying off some existing debt early as well as funds for future financing needs.”
POULTRY LAWSUIT
Also, the Associated Press reported late Monday about trouble with a key research report used by Oklahoma Attorney Drew Edmondson in litigation claiming Arkansas poultry companies have polluted Oklahoma watersheds. Tyson Foods is the largest defendant in the case, which is awaiting Edmondson’s appeal to the 10th U.S. Circuit Court of Appeals. The appeal is set to begin Wednesday.
A peer-reviewed magazine has refused to publish the studies of microbiologist Valerie Harwood, Edmondson’s chief witness in the case.
Marylynn Yates, an editor for the journal, Applied and Environmental Microbiology, said Harwood didn’t use proper controls and analyses and it’s not clear if her work would be applicable to other regions, according to the Associated Press report.
Edmondson’s case against the poultry companies has garnered national attention because an Edmondson victory would fundamentally alter the method of poultry waste disposal and could cost the defendants billions of dollars in fines and future costs associated with developing and implementing new poultry waste procedures.