Del Monte Meals, whose canned greens and fruit have lengthy been a staple on grocery retailer cabinets, introduced Monday that it has filed for chapter and can search a purchaser.
The practically 140-year-old firm is coming into Chapter 11 proceedings as a part of a restructuring help settlement (RSA) with its lenders.
“After a radical analysis of all accessible choices, we decided a court-supervised sale course of is the best approach to speed up our turnaround and create a stronger and enduring Del Monte Meals,” Greg Longstreet, president and CEO of Del Monte Meals, mentioned in an announcement.
Del Monte didn’t instantly reply to CBS MoneyWatch’s request for remark.
The canned-goods producer, based mostly in Walnut Creek, California, mentioned it has secured a dedication for $912.5 million from its lenders that may assist fund the corporate all through the going-concern sale course of and permit it to proceed working.
Del Monte has between $1 billion to $10 billion in each estimated liabilities and property, in accordance with its court docket submitting with the U.S. Chapter Courtroom for the District of New Jersey. The sale, the California-based firm mentioned in its assertion, will contain “all or considerably all the Firm’s property.” In its seek for a brand new purchaser, Del Monte mentioned it will prioritize the very best or greatest provide.
Altering client preferences
Del Monte is the fourth firm within the meals and beverage sector to file for Chapter 11 in accordance with information from Debtwire, a knowledge analytics agency.
“Usually, Del Monte says that client demand has declined, inflicting it to incur elevated prices associated to surplus stock that it has needed to warehouse and try to maneuver off cabinets with elevated promotional spending,” mentioned Sarah Foss, international head of authorized and restructuring at Debtwire, in an e mail to CBS MoneyWatch. “Shopper preferences have shifted away from preservative-laden canned meals in favor of more healthy options,” she added.
The transfer follows a difficult few years for the corporate, which has issued layoffs and made efforts to downsize to chop prices. Del Monte final 12 months began a debt overhaul, in accordance with Bloomberg.
