US banana producer Chiquita Brands International has announced that it has entered into definitive agreements for the sale of its banana-producing and port operations in Colombia to Invesmar, the holding company of C.I. Banacol, a Colombia-based producer and exporter of bananas and other fruit products.
Under the terms of the deal Chiquita will receive around US$28.5m in cash and $15m of notes and deferred payments for the operations, and the buyer will also assume around $8m of pension liabilities.
The transaction also includes two separate eight-year agreements for Chiquita’s purchase from the buyer’s affiliates of approximately 11 million boxes of Colombian bananas per year and approximately 2.5 million boxes of Costa Rican golden pineapples per year.
Chiquita said it expects to record an after-tax loss on the transaction of approximately $5m, which takes into account the two long-term fruit purchase agreements. The estimated loss may increase somewhat as a result of the recent industry-wide strike of banana workers in the Uraba region of Colombia, which was settled on 10 June. The company said additional costs cannot be estimated until the farms have been inspected.