Chiquita Halts Debt Payment; Stock Plunges

Chiquita Brands International Inc. said it stopped payment on $862 million in debt and planned to swap most of the debt for stock, a move that sent its share price plunging. The Cincinnati-based company said it retained the Blackstone Group as an advisor as part of a restructuring. Chiquita shares fell $1.44, or 48%, to close at $1.56 on the New York Stock Exchange. Chiquita acknowledged the debt moratorium could trigger demands for immediate payment on its interest and principal obligations. As a result, the company said existing shareholders would be “adversely affected.” Chiquita also said it had obtained a commitment for an 18-month secured bank credit of as much as $85 million, which it expected by early February. Chiquita blamed weak European currencies and eight years of European Union efforts at blocking its banana exports, saying it resulted in total damages of $1.5 billion. Before the European Union’s move, Chiquita was the leading banana importer in Europe.