AgFeed USA, LCC

Summary

Lender Advisor

Grand Junction, CO

AgFeed USA, LLC produces and markets hog and swine in the United States. With sow operations in Colorado, Oklahoma, and North Carolina, and finishing operations centered in Iowa, the U.S. operations produced approximately 1.3 million market hogs annually.

CMA was retained by counsel to represent the originating lender to AgFeed USA (“Company”) to provide consulting advice in connection with counsel’s preparation for litigation and advising such lender. CMA’s role was to review the 13-week cash forecasts created by the Company and provide a wind-down/liquidation analysis to assist the lenders in assessing its collateral position. The firm also provided guidance for a possible sale of the Company.

Engagement Highlights

AgFeed USA was acquired AgFeed Industries in September 2010 to establish a platform to pursue growth opportunities in the United States and bring “in-house” the techniques, technologies and expertise necessary to fully realize the potential of the enterprise scale, western style sow farms and the resulting production systems that were under development in China.
As of early 2013, the Chinese operations had still not realized their full potential from the acquisition of M2P2, and the US based lenders were funding the Chinese operations through unnecessary allocated overhead to AgFeed USA.
AgFeed USA entered into a forbearance agreement with the lenders on January 31, 2013, after the Company was in violation of several financial covenants in its credit agreement. The $64.7M revolver was scheduled to mature on February 1, but the Company did not repay it at that time.
Reviewed the 13-week cash forecasts and worked closely with the Company’s financial advisor to identify the working capital needs of the business, revolver draws and timing of repayment.
Created a financial model for the lender group that evaluated a liquidation/wind-down scenario under the assumption that the Company would operate under a Chapter 11 filing for 4 months and subsequently file for a Chapter 7 liquidation.

AgFeed USA, LCC

Summary

Lender Advisor

Engagement Highlights

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