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CHIQUITA PONDERS FLEET SALE
By David Hughes
Published: Tue, 26 September 2006
DEBT burdened banana company Chiquita Brands International is looking at selling off its Great White Fleet shipping operation.
The company has announced that it is taking “two initiatives designed to enhance financial flexibility and reduce debt, with the aim of investing the company's resources in ways that help to create long-term shareholder value”.
“The two actions,” the company statement says, “are the exploration of strategic alternatives for the sale and long-term management of its shipping assets and shipping-related logistics activities, and the suspension of its quarterly dividend.”
It adds that Chiquita 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.
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’s 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. The owned vessels consist of eight reefer ships and four container ships, which carry about 70% percent of Chiquita's banana volume shipped to core markets in Europe and North America.