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Campos-led Del Monte Pacific Limited (DMPL) talking to a potential investor for its US subsidiary Del Monte Foods Holdings Limited (DMFHL) after deciding to let lenders take control of unit instead of contributing $45 million for a dispute settlement.
This comes after DMPL said its Board of Directors “has decided not to provide any monetary contribution of up to $45 million to its U.S. subsidiary (DMFHL’s) New Term Facility lenders to settle the litigation announced on April 9, 2025. Such litigation had been dismissed with finality in the United States.”
It explained that, “This decision was made following a careful consideration of the effects on the broader DMPL Group, taking into account the U.S. macroeconomic conditions, its U.S. subsidiary’s historical performance, DMPL Group’s liquidity requirements, financial obligations, the operational needs of its Philippine subsidiary, Del Monte Philippines, Inc. (DMPI), and safeguarding shareholder interests.
DMPL said it has prioritized sustaining the momentum of its core Philippine and export businesses, which continue to deliver strong sales and profit growth.
Under the terms of the settlement with DMFHL lenders, a 25 percent equity stake in DMFHL will now be allocated to partially offset 37percent of the Settlement Loan.
The balance of 63 percent of the Settlement Loan continues to be a first-out incremental loan due from DMFHL to the New Term Facility lenders. The Settlement Loan retired the entire 2022 term loan.
With DMPL’s decision not to contribute to the settlement, lender-appointed directors will assume majority board representation in DMFHL and its subsidiaries.
“The Company is currently in preliminary discussions with a potential investor regarding investment opportunities in DMFHL.
“These discussions are expected to be protracted, and the New Term Facility lenders have expressed support for this initiative,” said DMPL without saying if this will be a strategic investor or an outright sale of its US business.
Despite these developments, DMPL assures its stakeholders that it remains committed to its strategy of managing the Group for sustainable growth.
It noted that, Del Monte Philippines Inc. continues to be the Group’s strongest performing unit, expanding sales by 13 percent to $582 million (₱33.5 billion) for the first nine months of fiscal year 2025 ending January, while net profit rose 80 percent to $61 million (₱3.5 billion).
Robust export sales were driven by strong demand for fresh pineapples and packaged products. Sales in the Philippines also rose with beverage, packaged fruit and culinary products faring well.
The litigation arose from allegations last October 2024 by non-participating U.S. lenders in the New Term Facility in 2024 regarding certain defaults and events of default under the 2022 term loan agreement.
DMPL’s U.S. subsidiaries contested these claims vigorously, ultimately leading to a settlement that dismissed the lawsuit.
Under the settlement terms, DMFI had retired the entire 2022 term loan through the Settlement Loan from a group of other existing lenders.
The agreement relating to the Settlement Loan required the Company to contribute up to $45 million by May 5, 2025, failing which the New Term Facility lenders would have the right to appoint majority of directors in the boards of DMFHL and its subsidiaries, and up to 25 percent of the Company’s equity in DMFHL would be allocated to partially cover the Settlement Loan.
