Castle & Cooke Spinoff of Dole Food Co. Delayed

Castle & Cooke Inc., a Los Angeles-based food and real estate company, will not be able to spin off its Dole Food Co. on schedule because of a delay in government approval and a tightening of credit in the real estate market, company officials said Tuesday.

The company’s directors decided that current credit conditions would make it difficult for Castle & Cooke’s development operations to obtain bank financing if the separation occurred on schedule by the end of June.

“The stand-alone company would just be the real estate company, and it needs credit,” said Carol J. Klein, public relations director. “In order to spin one off, they both need to be able to stand alone. There has been a tightening of credit on the real estate side. Under the current conditions, the real estate company would not be able to stand alone.”

Castle & Cooke announced a year ago that it would spin off Dole in an effort to create separate corporate identities for both divisions and, therefore, better finance both divisions’ growth.

“In order to grow these companies, we need to create two strong companies with their own identities,” David H. Murdock, company chairman and chief executive, said in 1989. “The managements of each business will be better able to focus exclusively on their own business operations.”

But tight credit and slow government approval have put a roadblock in Castle & Cooke’s progress. In a written statement, company officials said Tuesday that they have been pursuing the necessary government approvals for the proposed separation, including a ruling from the Internal Revenue Service that the transaction would be tax free.

But the ruling has not been received yet. Klein refused Tuesday to discuss the ruling and the IRS’ lack of action. And she said there is no new timetable for separation.

Dole, the world’s largest producer of pineapple, also markets other fruits and vegetables, some of them grown in California. Castle & Cooke owns the entire Hawaiian island of Lanai and has holdings in California and Arizona. Castle & Cooke stock closed Tuesday on the New York Stock Exchange at $36.125, down $0.125.