Del Monte plans prepayment of $91 million toward $4 billion debt

By Sahara Marte

New York, June 22 - Del Monte Corp. plans to prepay part of its $4 billion debt, Dave West, chief executive officer, said during the company's fourth quarter earnings conference call.

As defined by the term loan agreement, Del Monte intends to make a pre-payment of about $91 million. That makes up about 50% of the company's excess cash flow of fiscal 2012.

The transaction is expected to take place at the end of June.

With the prepayment, no quarterly amortization payments will be due in fiscal 2013.

West also said on the conference call that the company plans to boost earnings, especially in its consumer segment.

"I am confident that we can drive further change in order to strengthen our branded portfolio and go to market capabilities," added West.

New products in the pet sector increased segment net sales by 5.4% to $490 million for the fourth quarter, but did not compensate for the 8.6% decrease in the consumer segment. It dropped to $444 million from $486 million of the same quarter last year. The company attributed the decline to category softness in fruits and vegetables.

Del Monte's entire net sales decreased by 2% from 2011's fourth quarter, falling to $935 million from $951 million.

Del Monte is a manufacturer and marketer of processed foods based in San Francisco.

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