(May 13, 12:07 p.m.) Chiquita Brands International Inc. has continued its restructuring effort with an agreement to sell its German subsidiary, Atlanta AG, to Belgium-based Univeg Group.
Ed Loyd, Chiquita’s manager of investor relations and corporate communications, said net proceeds from the sale should be at least $85 million at current exchange rates, after taxes and fees. The deal, which is subject to European regulatory approval, should close by the end of the second quarter.
Loyd said Cincinnati-based Chiquita will use proceeds from the sale to reduce its debt. The company listed its debt at $886.1 million in its May 1 first-quarter earnings report.
Chiquita acquired Atlanta AG, its former customer, in 2003 when Chiquita converted Atlanta’s debt to Chiquita into equity in the company. The deal was valued at $50 million at the time.
Atlanta AG has 17 ripening and distribution centers for bananas and other produce in Germany and Austria. Loyd said Atlanta AG will continue to be Chiquita’s supplier of ripening and distribution services in those two countries.
Chiquita announced it had intended to sell the distributor in October 2007 as part of a massive restructuring effort. Atlanta AG had $1.2 billion in revenues from non-Chiquita products in 2007, but Loyd said Atlanta AG’s profitability was negatively affected when the European Union’s banana tariff regime was altered in 2006.
“The acquisition of this leading German fruit and vegetables trading company proves Univeg’s continued commitment to delivering added value to our customers,” Univeg chief executive officer Hein Deprez said in a news release. “Moreover, we can optimize our infrastructure and benefit from the customer service capabilities and quality assurance system of Atlanta AG in Germany and Austria.”