Trading Begins in Flexi-Van Rights Monday

Plans by Castle & Cooke to spin off its remaining Flexi-Van leasing operations have cleared another hurdle, the Los Angeles firm said. The company expects to net about $164 million from the deal.

Castle & Cooke, a major producer and marketer of fruits and vegetables, sold Flexi-Van’s container-leasing business in March to Itel for $215 million in cash, notes and stock. The remaining Flexi-Van business, which had revenue of $62 million last year, leases chassis and other transportation equipment. Flexi-Van is based in Hackensack, N.J.

The Securities and Exchange Commission approved the registration statement under which Castle & Cooke shareholders will be issued rights to buy stock in Flexi-Van, Treasurer David Cooper said. The rights will begin to trade Monday on a when-issued basis on the New York Stock Exchange, he said.

Castle & Cooke intends to sell a maximum of 7.45 million shares at $22.25 each. Eight rights will be required to buy one share of stock. Net proceeds of about $164 million are slightly more than Castle & Cooke’s investment in Flexi-Van, the company said.

Castle & Cooke is spinning off Flexi-Van because “we feel that, at this point in time, Castle & Cooke has completely recovered from its previous financial difficulties and it no longer needs Flexi-Van’s support,” Cooper said. It also allows the food and real estate company to pursue its own strategic plan, he said, and makes the two separate companies easier to understand.

Flexi-Van contributed $4.3 million of Castle & Cooke’s $49.3 million in net income for the 24 weeks ended June 20. Flexi-Van accounted for $29.4 million of Castle & Cooke’s $894.4 million in revenue during the period.