Philippine Tycoon Joselito Campos Del Monte Pacific's U.S. Unit Files For Bankruptcy
Del Monte Pacific—the canned food producer controlled by Philippine food-to-pharmaceuticals tycoon Joselito Campos and his siblings—said it will deconsolidate its U.S. subsidiary, which has filed for bankruptcy.
Del Monte Pacific announced the deconsolidation of Del Monte Foods Holdings Ltd. (DMFHL) late Wednesday in a statement to the stock exchanges of Singapore and the Philippines where shares of the Manila-based company are listed.
'The company is in the process of assessing the financial impact that its deconsolidation of DMFHL might have on the Del Monte Pacific Group,' Del Monte Pacific said in the statement. 'Updates on such financial implications will be provided in due course.'
Del Monte Pacific—known for its canned pineapple and fruit cocktail as well as its sauces—said its net investment in DMFHL was at $579 million as of Jan. 31. In addition, Del Monte Pacific and its affiliates have $169 million in net receivables from DMFHL and its units, including Del Monte Foods Inc. Del Monte Pacific shares tumbled 8.2% in morning trading in Singapore, heading for its second day of decline.
'The value to be impaired will be determined after the audit,' Del Monte Pacific said. 'Updates on the financial impacts will be provided in due course.' Del Monte Philippines, along with its Asian and international business, continue to perform well and its operation will remain uninterrupted, it added.
Del Monte Pacific said it lost control of DMFHL in June after skipping debt payments. As a consequence, creditors appointed a majority of directors to the boards of DMFHL and its units while 25% of Del Monte Pacific's equity in DMFHL was transferred to the lenders.
DMFHL newly constituted board entered into a restructuring agreement with a group of lenders. Under the agreement, all or substantially all of the company's assets and its subsidiaries would be sold through Chapter 11 proceedings in the U.S.
As part of the Chapter 11 proceeding, DMFHL and its subsidiaries will have access to approximately $912.5 million in 'debtor in possession' financing to fund their ongoing operations, Del Monte Pacific said.
Del Monte Pacific is among the assets owned by Campos and his siblings, who inherited Unilab, one of the Philippines' largest pharmaceutical companies that was co-founded by their late father, Jose Campos, almost eight decades ago. The Campos family is among the wealthiest in the Philippines with a net worth of $940 million, according to Forbes Asia.
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