Campos-led Del Monte Pacific Limited (DMPL) reported that its current liabilities already exceed its current assets, while its US subsidiary’s filing for Chapter 11 bankruptcy will result in a capital deficit in DMPL’s balance sheet.

In response to queries by the Singapore Exchange Securities Trading Limited (SGX) disclosed to the Philippine Stock Exchange, DMPL said that the Chapter 11 filing of Del Monte Foods Holdings Limited (DMFHL) in the US will lead to some write-offs.

“We expect the Company’s equity investment in DMFHL and certain receivables due from DMFHL and/or its subsidiaries to be subject to impairment. These write-offs are likely to cause a capital deficit in DMPL’s balance sheet,” the firm said.

DMPL’s net investment value in DMFHL was $579 million as of January 31, 2025 (end of the third quarter). In addition, DMPL and its affiliates have a net receivable of $169 million from DMFHL and its subsidiaries as of the same date.

“Nevertheless, DMPL does not expect these developments to cause any disruption to its operations outside the U.S. The extent of such impairment and any other material impacts are being finalized with the Company’s external auditors and will be disclosed by July 31, 2025,” it added.

DMPL noted that, “The Company wishes to clarify that DMPL has not guaranteed any loans of DMFHL or its subsidiaries and that DMPL has no contingent liability with respect to DMFHL’s or its subsidiaries’ financial obligations.”

Despite this, however, as of April 30, 2025, “the Group’s and the Company’s current liabilities (on a deconsolidated basis, without consolidating DMFHL) exceeded its current assets by $595 million and $382 million, respectively.

“This is mainly driven by the loans of the Philippine subsidiary, Del Monte Philippines (DMPI), being of a revolving nature as prescribed by local banking partners,” DMPL said.

It also noted that, “we expect the Company’s and DMPI’s long-term loans, including amortization, to be refinanced or extended. We have secured concurrence on such extension from a major lender, and we are in discussions with the other creditors on the extension or refinancing of the other loans.”

The company said its management believes that the DMPL will be able to pay or refinance its liabilities as and when they fall due and the group continues to find new sources of funding to improve cash management including incremental short-term lines from partner banks for meeting its short-term obligations that will provide sufficient working capital financing for it to meet its objectives and future financial obligations.

The Group generated positive cash flow from DMPI operations amounting to $226 million in fiscal year 2025 as DMPI, with its Asian and international businesses, continues to perform well, with resilient consumer demand, supported by a strong and stable supply chain.

“The Company is confident in DMPI’s ability to maintain uninterrupted business operations going forward,” DMPL said.

Meanwhile, the company’s management remains vigilant in managing its costs and the group will focus on the reduction of waste and inventory write-offs, improved productivity for processed pineapple variety in the next 12 to 24 months, and the reduction of DMPI’s fixed costs.

DMPL said it has received dividend payments and support from DMPI, which had declared cash dividends on a quarterly basis in fiscal year 2025.

“The Group continues to seek alternative sources of funding to enable the Group to meet its obligations as and when they fall due. Management has been pursuing equity raising initiatives as the Group’s Asian operations have restored profitability,” it concluded.