Del Monte inks deals to sell 4 US factories
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Campos family-led food and beverage conglomerate Del Monte Pacific Ltd. (DMPL) has sealed deals to sell four out of its 10 factories in the US and is now evaluating options to refinance about $1.4 billion worth of loans of its American consumer arm.
In a disclosure to the Philippine Stock Exchange on Tuesday, DMPL said that this “asset light strategy” should improve the cash flow margin of American unit Del Monte Foods Inc. (DMFI) by $50 million to $60 million or about 225 to 275 basis points over the next 24 months.
As part of the initiatives, DMFI completed the sale of its Cambria, Wisconsin operations and related employees to Seneca Foods Corp.
DMFI has also entered into an agreement to sell its production facilities in Sleepy Eye, Minnesota and Mendota, Illinois and expects the closure and sale of these facilities to be completed during the fourth quarter of 2020.
It has also sold equipment at its Crystal City, Texas facility and is considering additional proposals to sell the balance of the Crystal City assets. Production at rationalized facilities is being transitioned to other DMFI production facilities in the United States as well as to strategic co-packers.