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Exhibit 99.1
CHIQUITA
[LOGO] BRANDS
INTERNATIONAL
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NEWS RELEASE
FOR IMMEDIATE RELEASE
CHIQUITA ANNOUNCES FINANCIAL RESTRUCTURING INITIATIVE
COMPANY ALSO OBTAINS COMMITMENT FOR EIGHTEEN-MONTH BANK CREDIT FACILITY
CINCINNATI, OHIO, January 16, 2001 - Chiquita Brands International Inc.
(NYSE:CQB) today announced an initiative designed to resolve its upcoming debt
maturities and improve its financial liquidity. The Company intends to regain
its financial health by restructuring its highly leveraged balance sheet. In
addition, the Company will continue to pursue cost-reduction measures similar to
those that have significantly strengthened its operations in recent years.
The Company said that it proposes to restructure the publicly held debt of
Chiquita Brands International, Inc., which is a parent holding company without
business operations of its own. The Company emphasized that this intended
financial restructuring will not impact day-to-day operations with regard to its
employees, customers, suppliers, distributors and general business. The
restructuring would also not affect any debt of the Company's operating
subsidiaries, which will continue to be serviced by cash flow from the Chiquita
Fresh and Chiquita Processed Food businesses.
The Company has retained The Blackstone Group as its financial advisor and will
begin discussions with holders of the parent company's publicly held senior
notes and subordinated debentures concerning a balance sheet restructuring that
is in the best interests of the Company and its stakeholders. If successful, the
restructuring would result in the conversion of a significant portion of
Chiquita's outstanding $862 million of public debt into common equity. As part
of this initiative, the Company is discontinuing as of today all interest and
principal payments on its public debt, including $87 million of subordinated
debentures due on March 28, 2001. As a result, all of such debt may become
subject to acceleration. In addition, such a restructure, whether or not
administered through a court proceeding, would adversely affect the holders of
Chiquita's common and preferred stock.
Chiquita also announced that it has obtained a commitment for an eighteen-month
secured bank credit facility for up to $85 million to replace its expiring bank
revolving credit agreement. The new facility will be used to repay $50 million
of maturing subsidiary debt, and $35 million will be available for seasonal
working capital needs. Completion of the new facility, which is subject to
certain conditions, is expected by early February. Even with this new facility,
however, Chiquita does not expect to be in a position to repay the parent
company's subordinated debentures when they become due in March, and has
concluded that it is now therefore appropriate to enter into discussions with
holders of all of its public debt regarding a restructure.
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Steven G. Warshaw, President and Chief Operating Officer of Chiquita, said,
"This restructuring initiative is the right next step to ensure the long-term
success of our Company. We have already taken aggressive measures to increase
productivity and plan to continue with further cost enhancements that will
benefit our long-term operating results. Our operations are sound and we have
maintained the vitality and market leadership of the Chiquita brand while
dramatically improving our operating strengths and underlying cost structure.
"However, these accomplishments have been masked by over six years of continued
weakening of European currencies and the corrosive impact of eight years of an
illegal European Union banana import regime that today still remains unreformed.
Indeed, if not for the increased weakening of the euro since its inception in
January 1999, we would have already demonstrated substantial improvements in
Chiquita's operating performance and cash flow, even despite poor market
conditions experienced by all banana industry participants.
"Instead, the Company finds itself in a position where the increasingly severe
tightening over the past several months of the bank credit and other capital
markets previously accessed by Chiquita has made them unavailable to refinance
the parent company's near term maturities. Under these circumstances, we believe
that the restructuring initiative announced today is in the Company's best
interests.
Warshaw continued, "It is disheartening after years of suffering from the
European Union's illegal banana import regime that Chiquita's stockholders will
endure further hardship. However, at this point we are obliged to pursue a
restructuring that will provide a level of debt that our operations can
reasonably be expected to support, and enhance the future prospects for
Chiquita's profitable growth.
Warshaw concluded, "Chiquita's cash flow and financial resources, which have
been bolstered by the new credit facility announced today, will be more than
ample to meet day-to-day obligations of the business. For our employees,
customers, suppliers and operating partners around the world, this means
business as usual today, with the prospect of an even stronger Chiquita
tomorrow."
Chiquita is a leading international marketer, producer and distributor of
quality fresh fruits and vegetables and processed foods.
This press release contains certain statements that are "forward-looking
statements" within the meaning of the Private Securities Litigation Act of 1995.
These statements are subject to a number of assumptions, risks and
uncertainties, including product pricing, costs to purchase or grow (and
availability of) fresh produce and other raw materials, currency exchange rate
fluctuations, natural disasters and unusual weather conditions, operating
efficiencies, labor relations, ability to reach agreement with holders of
Chiquita's parent company debt regarding a restructuring, ability to obtain and
complete bank and other financings when and as needed, actions of governmental
bodies, and other
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market and competitive conditions, many of which are beyond the control of
Chiquita. Actual results or developments may differ materially from the
expectations expressed or implied in the forward-looking statements.
* * *
Chiquita Brands' financial challenges began with the announcement of an illegal
European Union banana import regime in 1992. Prior to this regime, Chiquita had
the largest share of the European market, with Europe accounting for nearly half
of Chiquita's sales and the largest part of its profits. The EU's illegal quota
and licensing regime has therefore severely impacted Chiquita's European market
share, profits and stock price. For every year that the illegal EU policies have
been in effect, the World Trade Organization has calculated that Chiquita has
sustained annual damages of almost $200 million, resulting in total damages
since 1993 of over $1.5 billion.
The United States and Latin America producing nations have won successive
international trade cases against illegal EU banana import policies. The EU
Commission has used legal delays and maneuvers to frustrate its opponents, while
at the same time waging a public relations campaign designed to shift blame to
the United States. Virtually all of the Western Hemisphere, including the
Caribbean, as well as the African nations and many EU member states consider the
EU Commission's latest scheme known as "first-come-first-served" to be
explicitly WTO-illegal.
Chiquita has suffered the most damage under Europe's illegal banana policies and
will continue to suffer harm if yet another illegal regime is allowed to go into
effect. Chiquita will continue its vigorous efforts to resolve this trade
dispute legally, fairly and in a way that restores Chiquita's market access in
conformity with international trade law.
FOR FURTHER INFORMATION, PLEASE CONTACT:
Steven G. Warshaw, President and Chief Operating Officer, or
William T. Sandstrom, Director of Investor Relations
Media contact: (513) 784-8517
Other calls: (513) 784-8100
