Chiquita to sell division assets to worker co-op
Apr 28, 2003 12:00 PM, from staff and wire reportsChiquita Brands International has signed an agreement with union leaders and the government of the Republic of Panama to sell assets of its Puerto Armuelles Fruit Co (PAFCO) division to a worker cooperative, Cooperativa de Servicios Multiples de Puerto Armuelles RL (COOSEMUPAR). This cooperative is led by members of the Armuelles banana workers union, called SITRACHILCO (Sindicato Industrial de Trabajadores de la Chiriqui Land Co y Empresas Afines). The parties expect the transaction to close by the end of May.
The purchase price paid to Chiquita for PAFCO’s assets will be about $19.8 million. PAFCO will use all of the sale proceeds to pay workers 100% of their severance benefits and cover certain other liabilities.
The cooperative will finance its purchase with long-term loans of $14.8 million from a local bank and $5 million from Chiquita, both of which will be repaid from the proceeds of future banana shipments. As part of the agreement, the new owners will enter into a 10-year contract to sell fruit to Chiquita at market prices, and Chiquita will provide some technical support to the cooperative in agricultural and logistics operations.