Del Monte Pacific (SGX:D03) said it has decided not to provide financial assistance to settle a litigation faced by the subsidiaries of its unit Del Monte Foods Holdings, according to a filing with the Singapore Exchange on Monday.
The litigation stems from allegations in October 2024 by non-participating US lenders in the new term facility in connection with certain defaults and events of default under the loan agreement. Del Monte Foods's US subsidiaries had contested the claims that resulted in a settlement, resulting in the dismissal of a lawsuit.
Under the settlement terms, Del Monte Foods retired the entire 2022 term loan through the settlement loan from another group of lenders. It also required Del Monte Pacific to contribute up to $45 million by May 5.
However, with the company deciding not to provide such financial assistance, the new term facility lenders now have the right to appoint the majority of directors on the boards of Del Monte Foods and its subsidiaries, and to allocate up to 25% of Del Monte Pacific's equity in Del Monte Foods to cover the settlement amount.
Del Monte Pacifc added that it is in initial stages of discussions with a potential investor regarding investment opportunities in its US subsidiary. The new term facility lenders have already shown support for the initiative, the filing added.
Shares of the company were up nearly 3% in recent trading.
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