US-based fruit and vegetables business Del Monte Foods is seeking a buyer after entering Chapter 11 bankruptcy proceedings.
“This is a strategic step forward for 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,” Greg Longstreet, the company’s president and CEO, said in a statement yesterday (1 July).
Del Monte Foods, owned since 2014 by Singapore and Philippines-listed Del Monte Pacific, has secured a commitment from its lenders for $912.5m in debtor-in-possession financing to keep the business going while a potential suitor is sought. It includes $165m in new funding, which is subject to court approval.
That approval applies to the US Bankruptcy Court for the District of New Jersey where the Chapter 11 application has been filed, according to the statement.
In a separate notice, Del Monte Pacific clarified its non-US subsidiaries, including those in Latin America, are not included in the bankruptcy proceedings of Del Monte Foods “at this time and continue to operate as usual”. It added the Chapter 11 does not relate to the parent business nor that of Del Monte Philippines.
Meanwhile, Del Monte Foods said it is “pursuing a value-maximising sale process as part of an overall strategic balance-sheet restructuring”. To that end, the company has entered a so-called restructuring support agreement (RSA) with certain of its creditors to pursue a “going-concern sale process for all or substantially all” of its assets.
“With an improved capital structure, enhanced financial position and new ownership, we will be better positioned for long-term success,” Longstreet said in the statement.
Del Monte Foods is best known for its namesake brand of canned fruit and vegetables. Kitchen Basics, a manufacturer of broths and stocks, was acquired in 2022 from fellow US food business McCormick & Co.
Its other brands feature Joyba teas, Contadina and Take Root Organics canned tomatoes, College Inn broths and stocks, and S&W, another line of canned fruits and veg, along with dressings and sauces.
While Del Monte Pacific does not break down the performance of Del Monte Foods in its financial report filings, Longstreet said in the statement the business has “faced challenges”, which he added have been “intensified by a dynamic macroeconomic environment”.
No inclination of what was to come was provided by Del Monte Foods last month when it announced the upcoming closure of its fruit products manufacturing plant in the city of Yakima, Washington state. The decision impacts 51 workers.
