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Marine Log

May 2, 2007

Chiquita in fleet sale and leaseback deal

Chiquita Brands International, Inc. (NYSE: CQB) reports that it has signed definitive agreements to sell its 12 refrigerated cargo vessels for $227 million. The ships will be chartered back from an alliance formed by Eastwind Maritime Inc. and NYKLauritzenCool AB.

The parties also entered a long-term strategic agreement in which the alliance will serve as Chiquita's preferred supplier in ocean shipping to and from Europe and North America.

As part of the transaction, Chiquita will lease back 11 of the vessels for a period of seven years, with options for up to an additional five years, and one vessel for a period of three years, with options for up to an additional two years.

The vessels to be sold consist of eight reefer ships and four container ships, which collectively transport approximately 70 percent of Chiquita's banana volume shipped to core markets in Europe and North America. The agreements also provide for the alliance to service the remainder of Chiquita's core ocean shipping needs for North America and Europe, including through multiyear time charters commencing in 2008 for seven additional reefer vessels.

"This long-term arrangement will increase our financial flexibility, simplify our business model and allow us to increase our focus on providing branded, healthy, fresh foods to consumers worldwide," said Fernando Aguirre, Chiquita's chairman and chief executive officer. "We are confident that the alliance parties, whose core business is global shipping, will ensure the continuing reliable, high-quality shipment of Chiquita products. The ship sale transaction will significantly reduce our debt, and the alliance will better position us to adapt our shipping services as we grow our business over time. At the same time, we anticipate that this transaction will generate synergies and help to keep operating costs competitive. Additionally, the long-term ship leases will help insulate us from further industry operating cost increases on a significant portion of our logistics portfolio for several years to come."

"This transaction is an exciting and rare opportunity to acquire a large, modern, highly efficient refrigerated fleet and to work with one of the best names in the produce industry," said John Kousi, chairman of Eastwind Maritime. "Not only is this a great opportunity to grow with Chiquita, but it also provides an excellent platform on which to optimize capacity and achieve cost synergies in the global shipment of produce, which is key to our business."

The parties expect to complete the transaction within 45 days.

As of March 31, 2007, the net book value of the assets to be transferred in the transaction approximated $125 million. Chiquita expects to realize an after-tax gain on the transaction of approximately $100 million, which will be amortized over the initial terms of the ship charters. The cash proceeds from the transaction will be used to repay approximately $170 million of debt, including $90 million of ship mortgage debt and $80 million in term loan and revolving credit borrowings. The remainder will be retained for general corporate purposes, including growth investments. The company's total-debt- to-capitalization ratio of 55 percent at March 31, 2007, would have been approximately 51 percent pro forma for the debt reduction resulting from the transaction.