Chiquita Brands International insisted yesterday [Tuesday] that it has emerged from its Pre-Arranged Chapter 11 restructuring as a healthy company with a solid financial structure.
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The company’s Plan of Reorganization went into effect yesterday, only 111 days after its filing. The Plan had received overwhelming approval from all classes of the company’s security holders and had been confirmed by the Court on 8 March.
Under the Plan, Chiquita is issuing 40 million shares of new common stock, 13.3 million warrants for the purchase of new common stock, and US$250m of new 10.56% Senior Notes, all of which will begin trading on the NYSE today. As stipulated in the Plan, Chiquita’s new securities replace all prior public debt and equity securities issued by the company.
The Plan has reduced the company’s debt and accrued interest by more than US$700m and its annual interest expense by about US$60m. Chiquita’s other creditors and its assets, strategy and ongoing operations have been unaffected by the Chapter 11 process.
Holders of Chiquita’s old senior notes and preferred stock will receive their new Chiquita securities shortly. Holders of Chiquita’s old subordinated debentures and common stock will need to submit their old certificates with a letter of transmittal in order to receive their new securities. The company will begin sending letter of transmittal forms to these holders tomorrow.
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