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February 5, 2008 |
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CHIQUITA BRANDS: Inks New Banana Pact with C.I. Banacol Chiquita Brands International Inc. disclosed in a regulatory filing with the Securities and Exchange Commission on Jan. 30, 2007, that its subsidiary International Chiquita International Limited, entered into an agreement with an affiliate of C.I. Banacol S.A., a Colombia-based producer and exporter of bananas and other fruit products, relating to the purchase of bananas produced in Colombia. In 2004, Chiquita had sold its banana-producing and port operations in Colombia to Banacol, and at that time had entered into an 8-year banana purchase agreement. Pursuant to the New Banana Agreement, which is effective as of Jan. 1, 2008, Chiquita will purchase approximately 11 million boxes per year of bananas produced by Banacol in Colombia through June 2012 on terms comparable to the 2004 Banana Agreement, but subject to a price increase of up to US$.25 per 40 lb. box if certain volume conditions are met and Banacol continues to remain current in certain of its obligations to Chiquita. In connection with entering into the New Banana Agreement, Chiquita and Banacol (i) terminated the 2004 Banana Agreement, effective as of Jan. 1, 2008, (ii) terminated, effective as of Dec. 31, 2007, an agreement which had been entered into in 2004 for Chiquita to purchase pineapples from affiliates of Banacol and (iii) entered into other commercial arrangements. The other commercial arrangements entered into by Chiquita and Banacol in connection with the New Banana Agreement and the termination of the 2004 Agreements include, among other things, arrangements providing for: (i) Banacol to make payments to Chiquita, or otherwise provide Chiquita with credits, of up to approximately US$10.0 million in the aggregate between now and 2012, (ii) Chiquita to contract, subject to certain subcontract rights and at prices approximating current fair market value, for certain shipping space that otherwise would have been used to ship pineapples to Chiquita under the 2004 Pineapple Agreement, (iii) Banacol to increase its available supply to Chiquita of bananas it produces in Costa Rica by approximately two million boxes per year at prices approximating fair market value for a minimum of two years. About Chiquita Brands International Inc. Cincinnati, Ohio-based Chiquita Brands International, Inc. (NYSE: CQB) -- http://www.chiquita.com/ -- markets and distributes fresh food products including bananas and nutritious blends of green salads. The company markets its products under the Chiquita(R) and Fresh Express(R) premium brands and other related trademarks. Chiquita employs approximately 25,000 people operating in more than 70 countries worldwide, including Belgium, Columbia, Germany, Panama, Philippines, among others. * * * To date, Chiquita Brands International Inc. carries Moody's Investors Service's B3 long term corporate family and Caa2 senior unsecured debt ratings which were last placed on Nov. 6, 2006. Outlook is Negative. |
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