Del Monte Foods Corporation II Inc. is pursuing a value-maximizing sale process as part of a balance-sheet restructuring. To facilitate this process, the company and some of its affiliates and subsidiaries commenced voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the District of New Jersey.

The company has entered into a restructuring support agreement (RSA) with a group of its lenders holding some of the company’s term-loan indebtedness. The RSA contemplates the company undertaking a going-concern sale process for all its assets, with the support of the lender group under the RSA, which is targeted at obtaining the highest or best offer to maximize value for all stakeholders.

“This is a strategic step forward for Del Monte Foods,” says Greg Longstreet, president and CEO of Del Monte Foods. “After a thorough evaluation of all available options, we determined a court-supervised sale process is the most effective way to accelerate our turnaround and create a stronger and enduring Del Monte Foods. With an improved capital structure, enhanced financial position and new ownership, we will be better positioned for long-term success.”

To support the company’s transactions and fund its operations, it has secured a commitment for $912.5 million in debtor-in-possession financing from some of its existing lenders, including $165 million in new funding, subject to court approval. This financing, along with cash from ongoing operations, is expected to provide sufficient liquidity during the sale process and fund the company’s regular operations, including its pack season that is presently underway.

“While we have faced challenges intensified by a dynamic macroeconomic environment, Del Monte Foods has nourished families for nearly 140 years, and we remain committed to our mission of expanding access to nutritious, great-tasting food for all,” Longstreet continues. “I am deeply grateful to our employees, growers, customers and vendors, as well as our lenders, for their support in helping us achieve our long-term goals.”

To enable the company’s transition into Chapter 11, it has filed several “first day” motions that, upon court approval, will enable it to continue regular business operations on an uninterrupted basis, including delivering food products.

Some of the company’s non-U.S. subsidiaries are not included in the Chapter 11 proceedings and continue to operate as usual.

Herbert Smith Freehills Kramer (U.S.) LLP and Cole Schotz P.C. are serving as legal counsel for the company, Alvarez & Marsal North America LLC is serving as its financial advisor, and PJT Partners is serving as its investment banker.