Company secures over US$900mn in financing to maintain operations during court-supervised sale process, with CEO describing the move as ‘a strategic step forward’ for the 140-year-old business
Del Monte Foods, a major US-based supplier of canned products including fruit, has filed for bankruptcy, with all of its assets up for sale.
In a statement, the company announced that it was pursuing a “value-maximising” sale process as part of an overall “strategic balance-sheet restructuring”.
In order to do so, it has entered voluntary Chapter 11 proceedings in the US Bankruptcy Court in New Jersey, along with certain affiliates and subsidiaries.
It also revealed it had entered a restructuring support agreement with some of its lenders, based on the assumption that the group will be sold off.
“This is a strategic step forward for Del Monte Foods,” said Greg Longstreet, president and CEO of Del Monte Foods. “After a thorough evaluation of all available options, we determined a court-supervised sale process is the most effective way to accelerate our turnaround and create a stronger and enduring Del Monte Foods.”
He added: “With an improved capital structure, enhanced financial position and new ownership, we will be better positioned for long-term success.”
The company revealed it had secured US$912.5mn in loans, including a new US$165mn facility, from existing lenders, subject to court approval.
This, along with cash from ongoing operations, is expected to provide sufficient liquidity during the sale process and fund the company’s ongoing operations.
Longstreet continued, “While we have faced challenges intensified by a dynamic macroeconomic environment, Del Monte Foods has nourished families for nearly 140 years, and we remain committed to our mission of expanding access to nutritious, great-tasting food for all.
“I am deeply grateful to our employees, growers, customers and vendors, as well as our lenders for their support in helping us achieve our long-term goals.”
A number of the company’s non-US subsidiaries are not included in the Chapter 11 proceedings and continue to operate as usual, the statement added.
Readers should note that Del Monte Foods is an entirely separate commercial entity from Fresh Del Monte Produce, with which it has no affiliation.
