Consumer
Del Monte Foods Restructuring Plan Shuffles Creditor Hierarchy
- Lenders providing $240 million in funding for canned food firm
- Deal cut with lender group would create new repayment order
Del Monte Foods Inc. plans to move its assets into a newly created legal entity.
Photographer: Daniel Acker/BloombergThis article is for subscribers only.
Del Monte Foods Inc. is overhauling its debt in a restructuring plan that leaves creditors that don’t participate at the bottom of the payout pecking order.
The canned fruit company plans to move its assets into a newly created legal entity, according to people familiar with the situation. The strategy — known in industry parlance as a drop-down transaction — allows Del Monte to raise fresh liquidity by borrowing against the transferred assets. The deal will prioritize participating lenders via debt swaps, said the people, who asked not to be identified discussing a private matter.