Del Monte Pacific Ltd. (DMPL), led by the Campos family, is considering the sale of its U.S. business, Del Monte Foods Holdings Ltd. (DMFHL), as part of a broader strategic reassessment influenced by macroeconomic pressures and the group’s financial exposure in the United States.
The company confirmed that it is in preliminary discussions with a potential investor on investment opportunities in DMFHL. “These discussions are expected to be protracted, and the new term facility lenders have expressed support for this initiative,” DMPL said in a disclosure. A formal announcement will be made if any material developments arise, it added.
The move follows a key development last month when Del Monte Foods Inc. settled a legal dispute with a group of lenders in the Delaware Court of Chancery over alleged defaults under a 2022 loan agreement. As part of the resolution, the lenders have now taken effective control of the U.S. business.
DMPL’s board opted against providing a monetary contribution to support DMFHL’s loan settlement, a reversal from earlier considerations to inject equity or a subordinated loan. Consequently, the lenders will appoint a majority of DMFHL’s board, and Del Monte’s 25 percent equity stake in the unit will be used to repay approximately 37 percent of the settlement loan. The remaining 63 percent is structured as a first-out incremental loan due from DMFHL.
As of January 2025, Del Monte Pacific’s net investment in DMFHL stood at USD579 million, with an additional USD169 million in receivables from DMFHL and its subsidiaries. The company has invested about USD1 billion in the U.S. unit since acquiring it—a business that once dwarfed its Philippine operations.
In light of these developments, DMPL said it will engage a financial adviser to assess the fair value of its investment in DMFHL and determine any potential impairments.
Del Monte emphasized that its decision was driven by a need to preserve group liquidity and support the operational requirements of Del Monte Philippines Inc. (DMPI), which continues to generate earnings. “The DMPL board believes that its decision protects the company’s interests and, importantly, will not disrupt the favorable business operations of its subsidiary DMPI,” the company said.
Despite the challenges in the U.S., DMPL reaffirmed its commitment to managing the group for sustainable growth.
