Chiquita to relaunch credit facility Wednesday

By Sara Rosenberg

New York, June 6 - Chiquita Brands International Inc. is scheduled to hold a bank meeting at 1 p.m. ET Wednesday to relaunch its proposed credit facility for the $855 million cash acquisition of the Fresh Express unit of Performance Food Group Co., according to a market source.

The original deal had been put on hold in April because of legal matters that are currently under review by the company and its financial institutions involving the conduct of some Chiquita employees.

Chiquita revealed Friday the internal investigation showed that some of its employees had shared pricing and volume information over many years with competitors in Europe and may have engaged in other conduct in violation of European competition laws and company policies.

Chiquita notified the European Commission of these wrongdoings and because of this voluntary notification and cooperation with the investigation, the European Commission has granted Chiquita immunity from any fines related to the conduct, conditioned on continued cooperation, among other things.

Around mid-May, Chiquita entered into a revised commitment letter for the loan financing needed for the Fresh Express acquisition that, aside from making structural changes when compared to the original loan package, extended the expiration of the commitment to June 30 from June 1.

The revised $675 million facility consists of a $100 million five-year revolver secured by Chiquita assets, a $200 million seven-year term loan B secured by Chiquita assets and a $375 million seven-year term loan C1 secured by Fresh Express assets. All tranches are priced at Libor plus 275 basis points.

By comparison, the $650 million original facility that was tabled in April consisted of a $125 million five-year term loan A (B1/B+) that was secured by Chiquita assets talked at Libor plus 175 bps, a $375 million seven-year term loan B (B1/BB-) that was secured by the Fresh Express assets talked at Libor plus 225 bps and a $150 million five-year revolver (B1/B+) that was secured by Chiquita assets talked at Libor plus 175 bps with a 50 basis point commitment fee.

Under the revised commitment, there is also a $150 million one-year term loan C2 secured by Fresh Express assets that would be available if the company is unable to issue $225 million of unsecured senior notes at the parent holding company level. Proceeds from the notes would be used to replace the term loan C2 and reduce the term loan B by $75 million.

Whether the structure outlined in the revised commitment letter will be the structure that the syndicate decides to launch Wednesday was unavailable prior to press time.

Wachovia and Morgan Stanley are joint lead arrangers and joint bookrunners on the deal, with Wachovia the left lead and Goldman Sachs the documentation agent

Chiquita is a Cincinnati marketer, producer and distributor of bananas and other fresh produce.

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