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Chiquita Reaches Strategic Shipping Agreement With Eastwind Maritime and NYKLauritzenCool
- Transaction Includes Sale and Lease-Back of 12 Owned Ships - - Proceeds to Be Used to Reduce Debt and Invest in Growth Opportunities -
CINCINNATI, May 1, 2007 /PRNewswire-FirstCall via COMTEX News Network/ -- Chiquita Brands International, Inc. (NYSE: CQB) today announced it has signed definitive agreements to sell its 12 refrigerated cargo vessels for $227 million. The ships will be chartered back from an alliance formed by Eastwind Maritime Inc. and NYKLauritzenCool AB. The parties also entered a long-term strategic agreement in which the alliance will serve as Chiquita's preferred supplier in ocean shipping to and from Europe and North America.

As part of the transaction, Chiquita will lease back 11 of the vessels for a period of seven years, with options for up to an additional five years, and one vessel for a period of three years, with options for up to an additional two years. The vessels to be sold consist of eight reefer ships and four container ships, which collectively transport approximately 70 percent of Chiquita's banana volume shipped to core markets in Europe and North America. The agreements also provide for the alliance to service the remainder of Chiquita's core ocean shipping needs for North America and Europe, including through multiyear time charters commencing in 2008 for seven additional reefer vessels.

"This long-term arrangement will increase our financial flexibility, simplify our business model and allow us to increase our focus on providing branded, healthy, fresh foods to consumers worldwide," said Fernando Aguirre, Chiquita's chairman and chief executive officer. "We are confident that the alliance parties, whose core business is global shipping, will ensure the continuing reliable, high-quality shipment of Chiquita products. The ship sale transaction will significantly reduce our debt, and the alliance will better position us to adapt our shipping services as we grow our business over time. At the same time, we anticipate that this transaction will generate synergies and help to keep operating costs competitive. Additionally, the long-term ship leases will help insulate us from further industry operating cost increases on a significant portion of our logistics portfolio for several years to come."

"This transaction is an exciting and rare opportunity to acquire a large, modern, highly efficient refrigerated fleet and to work with one of the best names in the produce industry," said John Kousi, chairman of Eastwind Maritime. "Not only is this a great opportunity to grow with Chiquita, but it also provides an excellent platform on which to optimize capacity and achieve cost synergies in the global shipment of produce, which is key to our business."

The parties expect to complete the transaction within 45 days. The alliance parties have committed to maintain the same high social and environmental standards and certifications that Chiquita introduced in its shipping operations, including International Maritime Organization, American Bureau of Shipping, ISO 9002, and ISO 14001 safety, quality and environmental standards as well as Chiquita's code standards related to labor conditions.

As of March 31, 2007, the net book value of the assets to be transferred in the transaction approximated $125 million. Chiquita expects to realize an after-tax gain on the transaction of approximately $100 million, which will be amortized over the initial terms of the ship charters. The cash proceeds from the transaction will be used to repay approximately $170 million of debt, including $90 million of ship mortgage debt and $80 million in term loan and revolving credit borrowings. The remainder will be retained for general corporate purposes, including growth investments. The company's total-debt- to-capitalization ratio of 55 percent at March 31, 2007, would have been approximately 51 percent pro forma for the debt reduction resulting from the transaction.

The following chart outlines the estimated impact to EBITDA, operating income, net income and earnings per share in 2007 (partial-year impact) and 2008 (full-year impact). While EBITDA and operating income will be reduced because of the conversion from owned assets to operating leases, the transaction is expected to be accretive to net income and EPS beginning in 2007, despite $4 million in one-time costs for severance and the writeoff of deferred financing costs, which will be expensed in the second quarter. The company estimates that it will achieve synergies of approximately $2 million in 2007 and $4 million in 2008 through efficiencies such as route combinations, cargo sharing and increased backhaul revenues.



                                Transaction's Estimated
                              Impact, Including Synergies
    ($ millions except EPS)      2007           2008(1)

    EBITDA                       ($12)          ($14)
    Depreciation                   $7            $11
    Operating Income              ($5)           ($3)
    Net Income                     $1            $11
    EPS                         $0.03          $0.25

    (1) Chiquita anticipates additional improvement during the subsequent
        six-year period (2009-2014), because the company will not incur
        certain inflationary operating expenses due to the fixed lease rates
        established in the agreement.

About Chiquita Brands International

With annual revenues of approximately $4.5 billion, Chiquita Brands International, Inc. (NYSE: CQB) is a leading international marketer and distributor of high-quality fresh and value-added food products - from energy- rich bananas and other fruits to nutritious blends of convenient green salads. The company's products and services are designed to win the hearts and smiles of the world's consumers by helping them enjoy healthy fresh foods. The company markets its products under the Chiquita(R) and Fresh Express(R) premium brands and other related trademarks. Chiquita employs approximately 25,000 people operating in more than 70 countries worldwide. For more information, please visit our web site at www.chiquita.com.

About Eastwind Maritime

Apart from the transactions announced today, the Eastwind Maritime group of companies owns 68 ships out of a total of about 105 in its commercially operated fleet. The vessels include refrigerated fruit carriers, freezer vessels, bulk carriers, product tankers and container ships. The largest sector of Eastwind's owned fleet is the refrigerated tonnage, while the most rapidly growing today is the container fleet.

Eastwind is headquartered in New York City. The group has business offices in Tokyo, London and Stockholm; technical management offices in Singapore, Piraeus and Shanghai; and crew recruitment centers in Myanmar, Kaliningrad and Tbilisi. Eastwind's worldwide staff, excluding sea-going personnel, totals about 200 employees.

About NYKLauritzenCool

NYKLauritzenCool is one of the world's largest operators of specialized reefer vessels. The company's fleet consists of more than 60 ships of between 380,000 and 760,000 cubic feet, which are operated in all major reefer trades globally.

The company head office, staffing around 60 specialists, is situated in the center of Stockholm. To support the worldwide services, NYKLauritzenCool has offices in Argentina, Brazil, Chile, Ecuador, Japan, New Zealand, South Africa, the United Kingdom and the United States, many of which also provide terminals and cold storage facilities. More than 120 agents work for the company in ports around the world.

LCL is a wholly owned subsidiary which provides integrated door-to-door, multi-modal and multi-destination logistics solutions to the world's perishable trades - providing local solutions with global reach.

Forward-Looking Statements

This press release contains certain statements that are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of Chiquita, including the impact of the 2006 conversion to a tariff-only banana import regime in the European Union; unusual weather conditions; industry and competitive conditions; financing; product recalls affecting the industry and related consumer concerns regarding food safety; the customary risks experienced by global food companies, such as the impact of product and commodity prices, food safety, currency exchange rate fluctuations, government regulations, labor relations, taxes, crop risks, political instability and terrorism; and the outcome of pending claims and governmental investigations involving the company.

Any forward-looking statements made in this press release speak as of the date made and are not guarantees of future performance. Actual results or developments may differ materially from the expectations expressed or implied in the forward-looking statements, and the company undertakes no obligation to update any such statements. Additional information on factors that could influence Chiquita's financial results is included in its SEC filings, including its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

SOURCE Chiquita Brands International, Inc.

Michael Mitchell of Chiquita Brands International, Inc., +1-513-784-8959,
mmitchell@chiquita.com
http://www.chiquita.com/
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