Springdale, AR - Tyson Foods Inc. said that its board approved a previously announced restructuring plan that will lead to a $196 million fourth quarter charge relating to cutting jobs and closing some of plants, as well as its exposure to Russia and Asia.
The poultry giant, whose fourth quarter ends Oct. 3, announced plans last month to close plants, cut its workforce and write down goodwill.
Total restructuring costs and asset impairment writedowns total $143 million and the company will incur an additional $53 million in charges, Tyson said in a statement.
Of that $53 million, $30 million is reserves for credit, inventory, currency and political risk in the company's export business to Russia and Asia, both of which have endured economic turmoil, Tyson said.
Tyson has recently announced the closure of two poultry processing plants and has slated for closure or consolidation certain additional facilities.
The company also plans to close and sell other excess poultry assets including feedmills, an office facility and farms, because they would require substantial capital spending to meet regulatory requirements.
Also, Tyson plans to redeploy, sell, or enter a business combination regarding its fishing vessels.
Tyson expects to improve its after tax income by $12 million to $15 million annually with part of the benefit being recognized for the year ending Oct. 2, 1999.
The restructuring will require additional capital expenditures of approximately $21 million to fund facility upgrades, expansions and production consolidation costs.
The anticipated three year net benefit to the company's cash flow, including anticipated proceeds from the sale of certain assets identified for disposition, is approximately $130 million, Tyson said.
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