Reuters: Bankruptcy News: Poultry group Doux seeks creditor protection -source

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Poultry group Doux seeks creditor protection -source Jun 1st 2012, 14:14 RENNES, France, June 1 | Fri Jun 1, 2012 10:14am EDT RENNES, France, June 1 (Reuters) - Debt-burdened poultry group Doux, which employs more than 3,000 people in France, is to seek court protection from creditors on Friday after failing to reach an agreement with bankers, a source close to the matter said. Family-owned Doux, one of the world's largest poultry exporters, declined to comment on the situation. The company earlier on Friday told a commercial court it had suspended payments to creditors, and was awaiting a decision later in the day from the court in Quimper, northwest France, on whether it would benefit from court protection to reorganise its debt or face liquidation, the source said. The company has said previously its debt of 340 million euros ($420.39 million) includes 200 million euros in Brazil, where it bought subsidiary Frangosul in 1998, and 140 million euros owed to the bank Barclays. The fate of Doux has raised concern in the French government, which is trying to prevent a feared wave of factory closures. Agriculture Minister Stephane Le Foll said it would go to great lengths to prevent the company's bankruptcy and protect farmers put at risk. In addition to employing 3,400 staff in France, Doux also has supply contracts with some 800 poultry breeders. Doux is also the largest beneficiary of European Union farm aid in France, with 55 million euros in the year to Oct. 15, 2011, due to export subsidies. Court protection would allow the company to try to convince Barclays to transform some or all of the poultry maker's debt into an equity stake. The court procedure could also enable Doux to absolve the French parent company of responsibility for its Brazilian unit's debts. Frangosul accounted for nearly half of Doux's sales of 1.4 billion euros in 2010. Doux, which competes with poultry producer LDC, is 80 percent owned by its founder Charles Doux. The firm decided earlier this month to lease Frangosul's assets in a renewable 10-year contract to Brazil's JBS , the world's top beef producer and the world's No. 2 poultry producer, through its U.S. subsidiary Pilgrim's Pride . Link this Share this Digg this Email Reprints

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