Refinancing, New Investment for Smithfield Foods

US - Construction has begun on a new Smithfield Foods plant in Wisconsin as the company has announced it has refinanced its $1.025-billion credit line.
calendar icon 9 April 2015
clock icon 3 minute read

Smithfield Foods, Inc. broke ground on a new $12-million bacon slicing plant at its facility in Cudahy, Wisconsin, last week.

The plant is expected to be fully operational by December 2015. The new 17,000-square-foot plant will include four slicing lines that will increase Smithfield Foods' bacon capacity by approximately 10 million pounds. It will be built in the same area that was destroyed by a fire in July 2009.

Daniel Kapella, president of Patrick Cudahy, Smithfield Foods Packaged Meats Division, said: "We are very excited about our new facility because it will enhance our competitiveness and help to secure the future of our bacon business and the jobs associated with it."

Initially, the new plant will not require additional employment.

Cudahy Mayor, John Hohenfeldt, added: "Smithfield Foods' new plant in Cudahy represents not only a significant investment in our community, but also emphasizes the company's ongoing commitment to our economic development."

This announcement underscores Smithfield's continued emphasis on growing its branded packaged meats business and comes on the heels of a recent organizational realignment whereby the company has unified all its independent operating companies, brands and marketing, including Patrick Cudahy, under one corporate umbrella.

On the same day, Smithfield Foods, Inc., announced it had entered into a new revolving credit facility totalling $1.025 billion with Rabobank Nederland, New York Branch, as administrative agent.

The new credit facility replaces the company's previous $1.025 billion revolving credit facility and includes an option, subject to certain conditions, to increase available commitments to $1.3 billion in the future. The new credit facility matures in May 2020.

C. Larry Pope, president and chief executive officer, explained: "Since the merger with WH Group, Smithfield Foods has achieved record profitability and reduced debt by $1 billion. The refinancing of our core working capital facility will further improve our cost of debt while ensuring ample liquidity.

"We wish to thank Rabobank and all our bank lenders for, once again, providing us their overwhelming support."

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