‘Deconsolidation from bankrupt US unit could improve Asian operations’
Del Monte Pacific Ltd. (DMPL) could begin to regain profitability as early as next year or by 2027, following its planned deconsolidation from its US subsidiary, Del Monte Foods Holdings Ltd. (DMFHL), which recently filed for Chapter 11 bankruptcy protection, analysts said.
“This move can be seen as a chance to improve Del Monte’s profitability in Asia, with recovery possible by fiscal year 2026/2027,” Unicapital Securities Inc. said Thursday, referring to the planned removal of DMFHL from the Campos-led DMPL’s consolidated balance sheet.
As of Jan. 31, 2025, DMPL’s net investment in DMFHL stood at $579 million.
For the first nine months of fiscal year 2025, DMPL posted a net loss of $92 million — an 82 percent increase from the $50.6 million loss in the same period last year — largely attributed to weak performance by US subsidiary Del Monte Foods Corp. (DMFC). Despite this, group-wide sales rose 3 percent year-on-year to $1.9 billion.
On July 2, DMPL disclosed that DMFHL filed for Chapter 11 bankruptcy in the US following a management change initiated by its lenders. The newly appointed board opted to restructure and pursue asset sales to meet debt obligations, the company said.
DMPL has since assured investors and the public that the bankruptcy proceedings will not affect its operations outside the US, particularly in Asia, where its businesses remain stable.
DMFHL is currently implementing a debt restructuring plan and asset sale under a Restructuring Support Agreement (RSA) signed with its creditors.
According to DMPL, the RSA provides for “a sale of all or substantially all of the assets of DMFHL and certain of its subsidiaries,” as part of a broader restructuring strategy to be executed under Chapter 11.
DMFHL and some affiliates filed for voluntary bankruptcy before the US Bankruptcy Court for the District of New Jersey on July 1 (US time).
The company also said DMFHL and its subsidiaries would have access to $912.5 million in debtor-in-possession (DIP) financing to support ongoing operations during the process.
“Chapter 11 is a US legal process focused on the financial and operational restructuring of a company,” DMPL explained. “It allows a company, through its existing management, to continue operating in the ordinary course of business.”
The court-supervised process generally halts creditor collection efforts through a moratorium while the debtor restructures liabilities, DMPL added. “Throughout this process, DMFHL and its operating subsidiary, Del Monte Foods Corp. II Inc., will continue normal business operations.”
DMPL is currently assessing the impact of the planned deconsolidation of DMFHL from its financial statements.
The bankruptcy filing follows a decision made in May 2025, when DMPL ceded control of DMFHL and three related entities — including Del Monte Foods Inc. (DMFI) — to settle a legal claim against DMFI.
DMPL said the decision was made “to protect the company’s interests and, importantly, will not disrupt the favorable business operations” of its Philippine unit, Del Monte Philippines Inc.
