DEL MONTE PACIFIC LTD. (DMPL) said management’s assessment that the group can proceed operating is supported by the performance of its Philippine business, continued access to revolving credit facilities, and ongoing debt restructuring efforts.
The corporate made the statement in a disclosure posted on the Philippine Stock Exchange (PSE) on Thursday in response to queries from Singapore Exchange Regulation (SGX RegCo), which asked management to clarify its assessment of the group’s ability to proceed operating as a going concern after it reported a net capital deficit of $589.9 million, net current liabilities of $787.2 million, and a money balance of $8 million as of April 30.
The corporate said the year-end money balance reflected its working capital cycle at the top of the financial yr and didn’t represent its overall liquidity position, citing available revolving credit facilities.
It added that its net current liabilities proceed to be significantly influenced by the revolving nature of certain bank borrowings which can be renewed on an ongoing basis.
“The board has conducted an intensive assessment of the group’s ability to proceed as a going concern and confirms that, taking into consideration the aspects and assumptions described below, management is of the view that the group has the power to proceed operating as a going concern,” the corporate said.
DMPL said the assessment relies partially on the performance of Del Monte Philippines, Inc. (DMPI), its principal operating subsidiary and sole material cash-generating entity. For the fiscal yr ended April 30, DMPI posted an operating profit of $153.6 million and a net profit of $103.1 million, up 43% and 37%, respectively, from a yr earlier.
“The group’s going concern position is due to this fact a function of its capital structure and the management of its financial obligations — not of any deterioration in its underlying business,” the corporate said.
DMPL said it’s finalizing an integrated financial statement with the help of an external financial restructuring adviser as a part of efforts to restructure its financial obligations.
Management’s assessment assumes the continued availability of revolving credit facilities, subject to ongoing discussions with the group’s lenders, continued constructive engagement with its principal financial counterparties, the successful completion and implementation of the integrated financial statement, and no material antagonistic change in operating conditions.
The corporate also disclosed that one among its principal banking counterparties has granted a proper waiver on applicable loan covenant requirements through September 2027. Discussions with its other principal banking counterparties on extending existing waivers beyond their current terms, which expire in or around September 2026, in addition to on the broader restructuring of the group’s bank facilities, remain ongoing.
DMPL said it has not received any formal notice of acceleration or enforcement from any of its banking counterparties. — Alexandria Grace C. Magno