The agreement was signed on April 28 between Chiquita, union leaders and the Panamanian government to sell the assets of the Puerto Armuelles Fruit Co, Pafco, to a worker co-operative, Coosemupar. The co-op is led by members of the Armuelles banana workers' union, Sitrachilco.

The transaction follows weeks of negotiation and is expected to close by the end of May. 'I am delighted that we have reached a fair and responsible long-term agreement,' said Cyrus Freidheim, Chiquita chairman and ceo. 'Workers will retain their jobs and the economic vitality of the local community will be sustained.' Pafco employs 3,500 workers and has 3,000ha under production in the Baru region on Panama's Pacific coast.

Chiquita will receive $19.8million for the sale and will use the funds to pay workers full severance pay.

As part of the agreement, the new owners have entered into an agreement for 10 years to sell fruit to Chiquita at market prices. The co-op will finance its purchase with long-term loans from local banks and Chiquita.

Last year, Pafco accounted for six per cent of all Chiquita's Latin American banana supply. Chiquita is the largest shipper out of Panama.

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