Chiquita Brands International Inc has announced two initiatives designed to enhance financial flexibility and reduce debt. The two actions are the exploration of strategic alternatives for the sale and long-term management of its shipping assets and shipping-related logistics, and the suspension of its quarterly dividend.
The company will consider various structures, including sale and lease-back of its owned ocean-going shipping fleet, sale and/or outsourcing of related ocean-shipping assets and container operations, and entry into a long-term strategic partnership to meet international cargo transportation needs.
Great White Fleet, a wholly owned subsidiary of Chiquita, manages the company’s global ocean transportation and logistics operations. The unit operates 12 owned refrigerated cargo vessels and charters other vessels to transport fresh fruit products from Latin America to North America and Europe. The owned vessels consist of eight reefer ships and four container ships, which transport about 70 percent of Chiquita’s banana volume to Europe and North America.
Chiquita’s board of directors has also voted to discontinue the company’s quarterly cash dividend of $0.10 per share. The firm intends to redirect about $17 million in annual funds otherwise allocated for dividends to reduce debt and enhance financial flexibility.
