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CINCINNATI - Chiquita Brands International Inc. today filed in Federal Court in Cincinnati a Pre-Arranged Plan of Reorganization under Chapter 11 of the U.S. Bankruptcy Code. The filing was made according to an agreement with bondholder committees announced Nov. 12 that will reduce Chiquita's debt and accrued interest by more than $700 million and its future annual interest expense by about $60 million.
The Chapter 11 plan involves a restructuring of only the publicly held debt and equity securities of Chiquita Brands International Inc., which is a holding company without any business operations of its own. The company'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. These subsidiaries will continue to operate normally and without interruption, and their creditors will be unaffected. Throughout the process, customers will continue to receive shipments normally and suppliers will continue to be paid in full according to normal terms. The company expects that the Chapter 11 case will be completed in 90 to 120 days.
Steven G. Warshaw, president and CEO of Chiquita, said: "The Chapter 11 filing brings us another step closer to completing the financial restructuring process we began in January. Since then, we have operated normally, as we will continue to do throughout the Chapter 11 process. It is our plan to emerge from Chapter 11 in the first quarter of 2002 with a solid balance sheet and a bright future. With the recent settlement of the U.S.-EU banana trade dispute, we will have even stronger prospects for revenue and earnings growth."