Dole to sell assets to cover debt
Westlake Village, Calif.-based Dole Food Co., the world's largest fresh-fruit and vegetable producer, is facing its own credit crunch and is looking to sell off land in Hawaii and California to avoid defaulting on $350 million in bonds.
The revenue generated from the unidentified assets would be used to infuse emergency capital into the firm. Dole's $350 million issuance, one-third of the firm's outstanding debt, is set to mature in 2009 and has dropped 13 percent this year. A JPMorgan Chase & Co. valuation model of credit-default swaps suggests a 76 percent chance of default in the next five years, according to Bloomberg News.
Dole has seen its ability to repay debt dwindle after being hit with a more than a 100 percent increase in European banana tariffs in 2006 and facing recent dramatic increases in shipping costs. The firm, which reported $7 billion in revenue last year, has so far absorbed the added costs as it has been battling chief rival Chiquita Brands International Inc. in the European market.