Amid bankruptcy of US arm, DMPL to stay afloat
Food giant Del Monte Pacific Ltd. (DMPL) has assured investors that it will continue operations and service debts despite the bankruptcy of its US subsidiary, saying that the strong performance of Philippine operations would be able to keep the company afloat.
The current liabilities of the group and DMPL had exceeded assets by $595 million and $382 million, respectively, DMPL confirmed in a regulatory filing on Monday.
According to the Campos-led canned food maker, the excess was due mainly to the loans of Del Monte Philippines Inc., although DMPL emphasized that it was able to secure an extension from a major lender.
It is also discussing similar terms with other creditors for its other obligations.
“Management believes that the company will be able to pay or refinance its liabilities as and when they call due,” DMPL said in response to queries of Singapore Exchange Securities Trading Ltd., on which it has been listed since 1999.
DMPL explained that the group was able to generate a positive cash flow of $226 million from its operations at Del Monte Philippines, which also encompasses its international business, due to strong consumer demand.
“The company is confident in [Del Monte Philippines’] ability to maintain uninterrupted business operations going forward,” DMPL added.
Last week, American unit Del Monte Foods Corp. II Inc. filed for bankruptcy and put “all or substantially all” its assets for sale as part of a deal with creditors.
Del Monte Foods received a commitment for $912.5-million debtor-in-possession financing to help sustain its ongoing operations while it finds other ways to eventually settle its debts.
Del Monte Foods president and CEO Greg Longstreet said this could speed up the company’s turnaround and position it for “long-term success.”
In the first nine months of its fiscal year covering the May 2024 to January 2025 period, DMPL’s losses ballooned by 82 percent to $92.24 million, owing to high costs at Del Monte Foods.
Although DMPL still expects some bleeding this year, it noted that it was seeking “alternative sources of funding to enable the group to meet its obligations as and when they fall due.”
