Chiquita Brands International, Inc has entered into definitive agreements for the sale of its banana-producing and port operations in Colombia to Invesmar Ltd, the holding company of CI Banacol SA.
Banacol is a Colombia-based producer and exporter of bananas and other fruit products.
In exchange for these operations, the agreement provides for Chiquita to receive, subject to certain post-closing adjustments, approximately $28.5 million in cash; approximately $15m face amount of notes and deferred payments (of which $3m is due within 90 days of closing); and the assumption by the buyer of approximately $8m of pension liabilities.
The transaction also includes two separate eight-year agreements for Chiquita's purchase from the buyer's affiliates of approximately 11m boxes of Colombian bananas per year and approximately 2.5m boxes of Costa Rican golden pineapples per year. Chiquita produces around 11m boxes of bananas a year in its Colombian operations, representing about nine percent of its worldwide banana volume.
The parties expect to complete the transaction within the next 30 days, subject to financing and certain other conditions. A copy of the definitive agreements, which set forth the terms and conditions of the transaction as well as the obligations of the parties post-closing, will be filed with the US Securities and Exchange Commission shortly.
Unions representing the current Chiquita workers in Colombia have been consulted regarding the sale agreement, and the existing collective bargaining agreement will remain in full force for the acquired operations. The buyer has also agreed to maintain certifications to the social, environmental and food safety standards that Chiquita introduced on these farms, including Social Accountability 8000, Rainforest Alliance and EurepGAP.
