Chiquita selling reefer ships to Eastwind, NYKLauritzenCool
Chiquita Brands International has agreed to sell its 12 refrigerated cargo vessels to an alliance formed by Eastwind Maritime Inc. and NYKLauritzenCool AB for $227 million.
Under terms of the deal, Chiquita will lease back 11 of the vessels for a period of seven years, with options for up to an additional five years, and one vessel for a period of three years, with options for up to an additional two years.
The vessels to be sold are eight reefer ships and four container ships, which collectively transport about 70 percent of Chiquita’s banana volume shipped to core markets in Europe and North America.
The agreements also provide for the alliance to service the remainder of Chiquita’s shipping needs for North America and Europe, including through multiyear time charters commencing in 2008 for seven additional reefer vessels.
“This long-term arrangement will increase our financial flexibility, simplify our business model and allow us to increase our focus on providing branded, healthy, fresh foods to consumers worldwide,” said Fernando Aguirre, Chiquita’s chairman and chief executive officer.
“We are confident that the alliance parties, whose core business is global shipping, will ensure the continuing reliable, high-quality shipment of Chiquita products. The ship sale transaction will significantly reduce our debt, and the alliance will better position us to adapt our shipping services as we grow our business over time.
“At the same time, we anticipate that this transaction will generate synergies and help to keep operating costs competitive. Additionally, the long-term ship leases will help insulate us from further industry operating cost increases on a significant portion of our logistics portfolio for several years to come.”
John Kousi, chairman of Eastwind Maritime. said: “This transaction is an exciting and rare opportunity to acquire a large, modern, highly efficient refrigerated fleet and to work with one of the best names in the produce industry. Not only is this a great opportunity to grow with Chiquita, but it also provides an excellent platform on which to optimize capacity and achieve cost synergies in the global shipment of produce, which is key to our business.”
The parties expect to complete the transaction within 45 days.