September 26, 2006
Chiquita may sell Great White Fleet
Chiquita Brands International, Inc. (NYSE: CQB) says it is exploring "strategic alternatives for the sale and long-term management of its shipping assets and shipping-related logistics activities."
The company, which also announced suspension of its quarterly dividend, will consider various structures, including the sale and lease-back of the company's owned ocean-going shipping fleet, the sale and/or outsourcing of related ocean-shipping assets and container operations, and entry into a long-term strategic partnership to meet all of Chiquita's international cargo transportation needs.
Great White Fleet, a wholly owned subsidiary of Chiquita, manages the company's global ocean transportation and logistics operations. Great White Fleet operates 12 owned refrigerated cargo vessels and charters additional vessels for use principally in the long-haul transportation of Chiquita's fresh fruit products from Latin America to North America and Europe.
Fernando Aguirre, chairman and chief executive officer, said, "Our Great White Fleet has represented a strong competitive advantage for Chiquita for many years, and continuing to excel in cold-chain management--delivering our high-quality fresh products quickly and efficiently--will remain critical to our company. However, we believe there is an opportunity to enhance shareholder value while maintaining high quality and competitive long-term operating costs by partnering with an expert shipping service provider that can grow with Chiquita. This would allow us to focus our efforts and resources even more on strengthening customer relationships and providing healthy, fresh foods to consumers. In addition, an asset sale would generate significant capital, which would be used primarily to reduce debt, as well as to invest in new growth opportunities."
Chiquita says it has been working with Fortis Securities as a financial advisor to support the exploration of strategic alternatives. The company does not expect to disclose developments with respect to this process unless and until its board of directors has approved a definitive transaction.
The owned vessels consist of eight reefer ships and four container ships, which transport approximately 70 percent of Chiquita's banana volume shipped to core markets in Europe and North America.