By Reuters, 11/28/01

NEW YORK -- Chiquita Brands International Inc., the parent of the well-known banana supplier, said Wednesday it filed its previously announced bankruptcy plan with a Cincinnati federal court.

The plan, which involves about $949 million of the holding company's publicly traded debt, will reduce the Cincinnati-based company's overall debt and accrued interest by more than $700 million and cut its future annual interest expense by about $60 million.

Chiquita expects to emerge from Chapter 11 bankruptcy protection within three to four months, said the spokeswoman, Magnes Welsh. The plan will be filed in U.S. Bankruptcy Court for the Southern District of Ohio, Western Division.

The banana giant's subsidiaries, which hold all of its operations, are independent legal entities that generate their own cash flow and have access to their own credit facilities, Chiquita said.

The subsidiaries will continue to operate normally and without interruption and their creditors will be unaffected. Customers will continue to receive shipments normally and suppliers will continue to be paid in full, according to normal terms.

On Oct. 12 Chiquita said it had reached a long-awaited agreement with creditors that would give senior debt holders almost 88 percent of the company's equity in return for cutting its debt and interest expenses.

Chiquita shares were up 3 cents to 46 cents on Wednesday morning on the New York Stock Exchange.

The stock, which has steadily declined for the past several years, is down about 86 percent from January. It fell as expectations of a bankruptcy filing grew. As is the case with Chiquita, holders of common stock usually lose most of their equity in a bankruptcy reorganization because debtors' claims legally take precedence.

The 131-year-old company said in January it would restructure $861 million of public debt after suffering losses of more than $1.5 billion over eight years during a dispute with the European Union over banana imports from former European colonial territories.

Completion of the restructuring plan is subject to certain conditions, including its acceptance by affected classes of public debt and equity holders, whose approval will be solicited as part of the court process, Chiquita said.

The company said it has already reached an agreement with the ad hoc committees representing its bondholders and believes that it will receive the votes required for approval of the plan.