Chiquita, Bruised by Spinach Disruption, Drops Dividend

CINCINNATI -- The industry's biggest official business victim of the outbreak of E. coli-infected spinach so far appears to be Chiquita Brands International, Inc. here, which said yesterday that the spinach-contamination crisis, as well as weak demand for its staple bananas, are hurting business enough for it to squash its quarterly dividend.

Chiquita, which owns the Fresh Express bagged-salad brand, said it would divert the 10-cent-per-share dividend, or $17 million, to cutting debt and keeping loose from a financial perspective. It also said it's mulling the sale and leaseback of its ocean-going shipping fleet, the sale or outsourcing of related shipping assets and container operations, and entry into a long-term partnership to meet its international cargo needs. (Story continues below.)

Its shares, meanwhile plummeted during the day, to close at $13.53, down $2.20. Looking ahead, Chiquita said it expected "lower sales and unforeseen costs" for the Fresh Express brand due to the E. coli outbreak.
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