Del Monte Pacific Ltd. has stated that its management's assessment of the company's ability to continue operating is supported by the performance of its Philippine business, access to revolving credit facilities, and ongoing debt restructuring efforts. The company made this statement in response to queries about its ability to continue as a going concern. This assessment comes after the company reported a net capital deficit and significant net current liabilities.
The company's year-end cash balance does not accurately represent its overall liquidity position, as it reflects the working capital cycle at the end of the financial year. Del Monte Pacific Ltd. also noted that its net current liabilities are influenced by the revolving nature of certain bank borrowings that are renewed on an ongoing basis. The company's available revolving credit facilities provide additional support to its liquidity position.
The assessment of the company's ability to continue as a going concern is based on the performance of its principal operating subsidiary, Del Monte Philippines, Inc. This subsidiary posted an operating profit of $153.6 million and a net profit of $103.1 million for the fiscal year ended April 30, representing a significant increase from the previous year. The company's going concern position is a function of its capital structure and management of financial obligations, rather than any deterioration in its underlying business.
Del Monte Pacific Ltd. is finalizing an integrated financial plan with the assistance of an external financial restructuring adviser as part of its efforts to restructure its financial obligations. The company's assessment assumes the continued availability of revolving credit facilities, subject to ongoing discussions with lenders, and the successful completion and implementation of the integrated financial plan. One of the company's principal banking counterparties has granted a formal waiver on applicable loan covenant requirements through September 2027.
Del Monte Pacific Ltd. is engaged in ongoing discussions with its other principal banking counterparties to extend existing waivers and restructure its bank facilities. The company has not received any formal notice of acceleration or enforcement from its banking counterparties. These developments suggest that the company is working to address its financial obligations and ensure its continued operation.
