Del Monte Pacific reaches settlement with US unit’s creditors, is not expected to recover equity interests

[SINGAPORE] Del Monte Pacific (DMP) has reached a settlement with the creditors of its embattled US unit Del Monte Foods (DMF), it said in a bourse filing on Tuesday (Feb 24).The settlement among the debtors, certain lender groups and the official committee of unsecured creditors and other stake holders was on Feb 20 approved in the United States Bankruptcy Court for the District of New Jersey. The court also approved the sale of all of DMF’s operating assets under Section 363 of the US Bankruptcy Code, DMP said in its Tuesday filing. The settlement and sale transactions are key milestones in the restructuring of DMF, which accounts for a major chunk of the operations of the Singapore- and Philippine-listed DMP.The settlement is expected to be implemented through a proposed Chapter 11 plan, which remains subject to confirmation by the US Bankruptcy Court and customary conditions.However, DMP said in its Tuesday filing that there is no assurance that the plan would be confirmed or the condition satisfied.Last June, DMP opted to skip a payment to the US unit’s lenders under a lawsuit settlement tied to the controversial debt restructuring. This resulted in DMP’s 25 per cent stake in the US unit being transferred to the lenders. DMP said then that its loss of control over DMF led to the deconsolidation of the subsidiary from its financial statements. The US unit subsequently entered a restructuring agreement with the lenders and started voluntary Chapter 11 bankruptcy proceedings to implement its terms. The settlement comes after a court-supervised auction of three of DMF’s assets:Its vegetable, tomato and refrigerated-fruit business assets, the global ownership of Del Monte’s brand and related intellectual property, subject to existing licensing agreements to Del Monte Produce;The broth and stock business segment to B&G foods;The shelf-stable fruit business assets, other than production assets, including the rights and licences to use Del Monte and S&W brands for shelf-stable packaged ambient fruit and fruit sauces in the US and Mexico.DMP had recognised the full impairment of the related current and long-term assets of US$703.5 million, a complete write-down of its investments in the US unit. DMP deconsolidated these entities from May 1, 2025. It said: “Accordingly, the company does not expect to realise any recovery in respect of its equity interests in such entities.”The approvals do not result in any material change to the financial impact that DMP previously disclosed. Shares of Del Monte Pacific closed down 2.1 per cent or S$0.002 to S$0.092 on Tuesday.