THE American unit of Del Monte Pacific Ltd. has raised $1.3 billion from bond issuances to trim loan facilities and recapitalize its balance sheet.
In a disclosure to the stock exchange Monday, Del Monte said its subsidiary Del Monte Foods, Inc. (DMFI) was able to generate new financing to reduce its total loan facilities to $950 million from $1.4 billion.
The new financing is composed of $500 million from a five-year bond issuance, $450 million from a new three-year asset-based loan (ABL), and $378 million from selling equity to parent firm Del Monte.
As DMFI issued the five-year senior secured notes and signed a three-year ABL, it took a $150-million investment in new equity from its parent firm Del Monte, and converted $228 million of its second lien repurchase loans into common equity in DMFI.
The completion of these transactions resulted in a recapitalization of the company’s balance sheet, allowing it to lay out new plans for Del Monte’s future growth.
“This transaction is an important milestone for DMFI and the (Del Monte Group),” Del Monte Managing Director and Chief Executive Officer Joselito D. Campos, Jr. said in the statement.
“In this new market environment, Del Monte has seen significantly increased demand for its healthy, shelf-stable products across all product lines. Today’s recapitalization and de-levering position the company to take full advantage of these new market opportunities,” he added.
DMFI claims to be the leading producer, distributor and marketer of plant-based food products in the United States, owning brands such as Fruit Naturals, Orchard Select, SunFresh and Fruit Refreshers.
“We are tremendously gratified to see such enthusiasm for the Del Monte story among investors. We appreciate this recognition of the company’s recent performance, the success of our asset-light cost management initiatives, and our plans for growth and profitability going forward,” DMFI President and Chief Executive Officer Greg Longstreet said in the statement.
Shares in Del Monte at the local bourse closed flat on Monday at P3.96 apiece. — Denise A. Valdez