139‑YO canned-food brand Del Monte Foods files for bankruptcy, seeking buyer

The US chapter of 139-year-old canned fruit company Del Monte Foods filed for Chapter 11 bankruptcy in New Jersey on Tuesday under an agreement with some of its key lenders, less than a year after executing a controversial debt restructuring.

The canned food company has listed liabilities between $1 billion and $10 billion in court documents. 

The company executed a debt overhaul last year, which turned out to be the subject of a lawsuit by left-behind lenders. Del Monte Foods defaulted on a $725 million financing agreement when it shifted the assets away from the reach of lenders. [Source: MoneyControl]

Greg Longstreet, President and CEO of Del Monte Foods, disclosed that the decision to file for bankruptcy was made after careful consideration of all options.

He said that a court-supervised sale process is the most effective way to accelerate their turnaround and build a stronger brand.

The company has secured $912.5 million in new funding to stay afloat during this period.

Longstreet stated that an improved capital structure, an enhanced financial position, and new ownership would better position the company for long-term success.

He also acknowledged that the company has faced challenges in a dynamic macroeconomic environment, with consumers reducing expenses and shifting toward private labels.

Del Monte Foods has acknowledged a decline in consumer demand and higher costs due to excess inventory. Once a market leader, the company had to warehouse and promote its products more aggressively.

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About Del Monte Foods

Founded in 1886, Del Monte Foods built its famous cannery in San Francisco in 1907 and by 1909, the company was operating the world's largest fruit and vegetable cannery.

Currently, Del Monte Foods is looking for a buyer who can take over the business and steer it toward long-term success.

"Consumer preferences have shifted away from preservative-laden canned food in favour of healthier alternatives," said Sarah Foss, global head of legal and restructuring at Debtwire.

Notably, the American food production company is a well-established brand in India. It has been bringing flavours from around the world to Indian kitchens.

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