Del Monte Foods Holdings Ld. Inc., (DMHFL) the US-based subsidiary of Campos Group-owned Del Monte Pacific Limited (DMPL) has filed for bankruptcy in the US.
DMFI said it filed for Chapter 11 proceedings after reaching a restructuring agreement with lenders. Chapter 11 is a US legal process focused on the financial and operational restructuring of a company. It allows a company, through its existing management, to continue operating in the ordinary course.
The court-supervised process enables the debtor to come up with a process to address the company’s existing debts during
DMFHL is one of the largest producers, distributors and marketers of branded processed food for the US retail market.
DMPL said in a disclosure to the stock exchange DMFHL secured $912.5 million in “debtor-in-possession” financing to fund ongoing operations.
“The newly-constituted board of DMFHL has determined to pursue a value-maximizing sale process. The company has been advised that DMFHL has entered into a restructuring support agreement [RSA] with a group of its term lenders holding certain of DMFHL’s secured debt,” DMPL said
“The RSA contemplates a sale of all or substantially all of the assets of DMFHL and certain of its subsidiaries, among other strategic transactions to be implemented through Chapter 11 proceedings in the US,” it said.
The company said the filing is part of DMFHL’s overall strategic plan aimed at maximizing value for its business operations and those of its subsidiaries.
DMFHL and its operating subsidiary, Del Monte Foods Corp. II Inc., will continue normal business operations.
DMPL said it is now evaluating the potential financial implications of this filing on the broader DMPL Group.
“DMPI, with its Asian and international businesses, continues to perform well, with resilient consumer demand, supported by a strong and stable supply chain. The company is confident in DMPI’s ability to maintain uninterrupted business operations going forward,” the company said.
