DEL MONTE PACIFIC LTD. (DMPL) said management’s assessment that the group can continue operating is supported by the performance of its Philippine business, continued access to revolving credit facilities, and ongoing debt restructuring efforts.

The company made the statement in a disclosure posted on the Philippine Stock Exchange (PSE) on Thursday in response to queries from Singapore Exchange Regulation (SGX RegCo), which asked management to explain its assessment of the group’s ability to continue operating as a going concern after it reported a net capital deficit of $589.9 million, net current liabilities of $787.2 million, and a cash balance of $8 million as of April 30.

The company said the year-end cash balance reflected its working capital cycle at the end of the financial year and did not represent its overall liquidity position, citing available revolving credit facilities.

It added that its net current liabilities continue to be significantly influenced by the revolving nature of certain bank borrowings that are renewed on an ongoing basis.

“The board has conducted a thorough assessment of the group’s ability to continue as a going concern and confirms that, taking into account the factors and assumptions described below, management is of the view that the group has the ability to continue operating as a going concern,” the company said.

DMPL said the assessment is based in part on the performance of Del Monte Philippines, Inc. (DMPI), its principal operating subsidiary and sole material cash-generating entity. For the fiscal year ended April 30, DMPI posted an operating profit of $153.6 million and a net profit of $103.1 million, up 43% and 37%, respectively, from a year earlier.

“The group’s going concern position is therefore a function of its capital structure and the management of its financial obligations — not of any deterioration in its underlying business,” the company said.

DMPL said it is finalizing an integrated financial plan with the assistance of an external financial restructuring adviser as part of efforts to restructure its financial obligations.

Management’s assessment assumes the continued availability of revolving credit facilities, subject to ongoing discussions with the group’s lenders, continued constructive engagement with its principal financial counterparties, the successful completion and implementation of the integrated financial plan, and no material adverse change in operating conditions.

The company also disclosed that one of its principal banking counterparties has granted a formal waiver on applicable loan covenant requirements through September 2027. Discussions with its other principal banking counterparties on extending existing waivers beyond their current terms, which expire in or around September 2026, as well as on the broader restructuring of the group’s bank facilities, remain ongoing.

DMPL said it has not received any formal notice of acceleration or enforcement from any of its banking counterparties. — Alexandria Grace C. Magno