Del Monte Foods, a household name synonymous with canned goods and packaged foods, has filed for bankruptcy. This move marks a dramatic shift for the company, which has been a staple in American kitchens for generations. The company announced that it has voluntarily entered Chapter 11 and is undergoing a process to sell its assets. "After a thorough evaluation of all available options, we determined that a court-supervised sale process is the most effective way to accelerate our turnaround and create a stronger and more enduring Del Monte Foods," said President and CEO Greg Longstreet.
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The canned food company has obtained $912.5 million in new funding, which will enable it to stay afloat throughout the selling process and continue to operate normally as it approaches the peak canning season. According to court documents, the corporation stated liabilities valued between $1 billion and $10 billion. "With an improved capital structure, enhanced financial position, and new ownership, we will be better positioned for long-term success," Longstreet added.
Del Monte has been dealing with numerous geopolitical and economic problems for a while. The company stated in the filing that demand reached all-time highs during the coronavirus epidemic when more people were dining at home, and the firm pledged to increase production levels. However, Del Monte was left with too much inventory, which compelled it to hold, write off, and "sell at substantial losses."
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The company added that it has a significant debt load since Del Monte Pacific Limited bought it in 2014 and borrowed money to pay for the purchase. The company's annual cash interest payment has nearly quadrupled since 2020 as interest rates have continued to rise. Del Monte began operations in 1886, and in 1907, it constructed its renowned cannery in San Francisco. By 1909, the firm claimed to have run the world's largest fruit and vegetable cannery.