Thursday, March 21, 2002

New owners take over Chiquita


Warshaw out; Lindner down

By Cliff Peale, cpeale@enquirer.com
The Cincinnati Enquirer

        The fallout from an eight-year spiral into bankruptcy hit Chiquita Brands International Inc. on Wednesday, costing chief executive officer Steve Warshaw his job.

        On the first day after Chiquita emerged from bankruptcy, bondholders now in control of the company replaced Mr. Warshaw with acting chief operating officer Robert Fisher, a former president of Chiquita rival Dole Food Co.

Warshaw
Warshaw
        The new directors also elected Cyrus Freidheim, retiring vice chairman of Chicago consulting giant Booz Allen Hamilton, as chairman of the board and chief executive officer. He said the board will embark on a “top-to-bottom review” of Chiquita's far-flung global operations.

        “Profitability and shareholder value are the focus,” he said. “I do believe in growth, but only if it means greater profitability for the shareholder.”

        The early-evening announcement capped a whirlwind Wednesday in which 1.6 million shares of the new Chiquita stock changed hands and forcefully signaled that the 18-year reign of Carl Lindner at Chiquita had ended.

        Mr. Lindner, until now chairman of Chiquita, controls less than 5 percent of Chiquita's common shares and is one of six members of the board.

        “I certainly will value his counsel, but Carl is one board member now,” Mr. Freidheim said. Mr. Lindner, through his office, declined to comment.

        Mr. Freidheim said Mr. Warshaw resigned but would not elaborate. He said he hoped that other senior Chiquita officials would stay.

        Mr. Warshaw could not be reached for comment Wednesday night.

        Mr. Freidheim said Chiquita “is not for sale,” at least until the review is finished.

        Peter Heberling, managing director of the Latin America Finance Group, which has said it is preparing an $800 million bid for Chiquita, said the move “clearly signals that the bondholders are in control.”

        “We're not about to do a hostile takeover,” he said. “We're simply waiting to see what the company decides to do.”

        Meanwhile, investors appeared to support the company's valuation of about $15 a share as trading in Chiquita's new stock opened on the New York Stock Exchange.

        While Chiquita's value was negotiated by lawyers during the company's 100-day stay in bankruptcy, the stock Wednesday rose 9 cents to $14.99 share as more than 1.6 million shares traded hands.

        The company's business prospects appear to be improved. It shed $700 million in debt in bankruptcy and faces better prospects from its most profitable market, Europe.

        The bondholders received 95 percent of the new shares and $250 million in new bonds in exchange for Chiquita's debt.

        Old Chiquita shareholders received only 2 percent of the new shares after the bankruptcy. They also received warrants to buy more shares at about $19 a share within seven years.

        Those warrants closed Wednesday at $4.85 a share, meaning that someone was willing to pay that much for the right to buy Chiquita shares at $19 later.

       



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