Del Monte Foods has filed for Chapter 11 bankruptcy and is looking for a buyer. The 138-year-old company announced the move late Tuesday. It said the decision came after evaluating all options.
The company confirmed it will sell all of its assets. Its product lines include College Inn broths, Contadina tomatoes, and its flagship Del Monte brand. The CEO said this process will help speed up its turnaround.
โAfter a thorough evaluation of all available options, we determined a court-supervised sale process is the most effective way to accelerate our turnaround and create a stronger and enduring Del Monte Foods,โ said Greg Longstreet, the President and CEO, in a statement.
Del Monte said it has secured $912.5 million in new funding. This money will allow it to continue operating normally during peak canning season. The company listed liabilities between $1 billion and $10 billion.
โWith an improved capital structure, enhanced financial position and new ownership, we will be better positioned for long-term success,โ Longstreet added. He noted the challenges came from a โdynamic macroeconomic environment.โ
Longstreet pointed to consumers spending less and moving toward private labels. These shifts hurt the companyโs sales resulting in the demand to decrease.
Sarah Foss, global head of legal and restructuring at Debtwire, shared more details. She said the company has had to deal with extra costs to store unsold goods.
She explained that consumer habits have changed. People now prefer healthier foods over โpreservative-laden canned food.โ These trends increased pressure on Del Monteโs business model.
Del Monte began in 1886 and built its iconic San Francisco cannery in 1907. By 1909, it was running the largest fruit and vegetable cannery in the world. The companyโs long legacy now faces an uncertain future.
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