South Korean poultry firm bids for Allen Family Foods
An affiliate of a South Korean poultry firm was the winning bidder in an auction for the assets of Allen Family Foods, the bankrupt Seaford, US-based poultry processor.
Harim USA, a unit of publicly traded Harim Holdings Co., won the right to purchase Allen's assets by outbidding poultry producer Mountaire Farms at a marathon bankruptcy auction that took place on Monday.
It is though that the deal will keep Allen's Delaware facilities open, including a large manufacturing facility saving hundreds of jobs.
Financial terms of the deal have not been disclosed although Mountaire had bid $30 million to acquire most of Allen's assets and assume its debt obligations.
Harim attempted to enter the US chicken market once before when it was outbid earlier this year in its efforts to acquire Georgetown-based Townsends Inc. by a dual $76 million bid by Peco Foods Inc. and Omtron Ltd.
Allen filed for federal bankruptcy protection June 9, blaming its downfall on the surging price of corn, which is used as corn feed, operational miscues and a move by the ailing Wilmington Trust bank that restricted the company's cash flow by slashing its line of credit by nearly 90% during the recent credit crunch -- from $20 million to $2.5 million in August 2010.
The deal is expected to close in mid-August, pending the court's approval.
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