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Chiquita Brands International Inc. Message Board

  • Realplayerplus Realplayerplus Oct 29, 1998 10:38 AM Flag

    Tropical outlook

    Weather reports for Honduras and Guatemala
    continue to make headlines for the second or third day.
    Any idea on how this might shake out for the major
    players in the banana industry? CQB, DOL, FDP, FYF.L,
    anyone else?

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    • Did anyone see it.

      Friends tell me it
      painted a picture that CQB would probably abandon
      Honduras. Their opinion, NOT the comments from anyone
      connected with La Tela or CQB

      What was
      said?

      Does anyone have a transcript?

    • The EU has drawn up reformed rules, due to take
      effect in January. Brussels says the new policy complies
      with the WTO ruling, but Washington
      disagrees.

      The United States believes the new rules, which set
      import quotas for Latin American bananas and for fruit
      from former European colonies in the Caribbean,
      discriminate against U.S. distributors of Latin American
      bananas such as Dole <DOL.N> and Chiquita Brands
      <CQB.N>.

      On Tuesday, the USTR published a long list of
      European exports that could be hit with punitive duties,
      ranging from wine, fruit juice and cakes to toys, light
      fittings, ballpoint pens, vacuum cleaners and paper
      products.

      If it persists with the sanctions threat, it would
      whittle down the list of targeted goods by December 15
      for sanctions to take effect on February 1.

      EU
      exports to the United States of goods on the list were
      worth 1.387 billion Ecus ($1.63 billion) in 1997, Nigel
      Gardner, spokesman for European Trade Commissioner Sir
      Leon Brittan, said. Gardner described the list as
      "completely arbitrary".

      "It's arbitrary in its value.
      They make no justification for this value. And it's
      arbitrary in what it covers," he said.

      If
      implemented the sanctions would have "widespread damaging
      effects right across the economy of the EU," he said.

    • 11/11 09:25 FOCUS-EU to take WTO action over U.S.
      sanctions


      By Adrian Croft

      BRUSSELS, Nov
      11 (Reuters) - The European Union on Wednesday
      condemned as "completely arbitrary" a U.S. threat to slap
      sanctions on up to $1.63 billion of EU exports and pledged
      legal action in two weeks unless Washington dropped the
      plan.

      Jacques Santer, president of the EU's executive
      Commission, wrote to U.S. President Bill Clinton appealing to
      him to give "urgent personal attention" to a row over
      banana trade which is provoking a crisis in
      usually-close transatlantic relations.

      U.S. action
      against the 15-nation EU "would be a grave political
      misjudgment at a time when we should be working together...to
      alleviate the world's economic difficulties," Santer
      wrote.

      "I cannot overstate the political importance of this
      matter."

      The U.S. Trade Representative's (USTR) office on
      Tuesday published a list of dozens of European products
      -- ranging from wine to suitcases -- that could be
      hit with punitive, 100 percent duties next February
      if Washington judges that the EU has failed to
      implement a World Trade Organisation (WTO) ruling that its
      banana import policy broke world trade rules.

      The
      row between the two commercial giants, which in 1997
      traded goods worth around $320 billion, has the
      potential to be very damaging although EU officials say
      they would refrain from retaliating with sanctions of
      their own.

      Santer told Clinton that unilateral
      U.S. action would be a "clear breach" of U.S.
      commitments to the WTO and said the EU would launch a case
      against the United States at the Geneva-based world trade
      body on November 25 unless Washington withdrew its
      sanctions threat.

      If the United States went ahead
      with sanctions, it would severely damage the
      multilateral trade system and "undermine the agenda for
      positive EU-U.S. cooperation on which we have just
      agreed", Santer said, referring to a new initiative to
      remove technical barriers to transatlantic
      trade.

      He urged the United States to settle its argument
      with the EU through the WTO's dispute settlement
      procedures and said he believed EU governments would agree
      to an accelerated WTO review of whether the EU's new
      banana policy complied with WTO rules.

      WTO chief
      Renato Ruggiero said on Wednesday the United States and
      EU must work out the problem. "Both partners have a
      responsibility to settle the issue," he said in a
      statement.

      The row has flared over a product that EU officials
      say is of "tiny" importance for the U.S.
      economy.

      In September 1997, the WTO ruled in favour of the
      United States and a group of Latin American countries
      which argued that the EU's banana import rules favoured
      Caribbean growers over their producers and marketing
      companies.

    • 4) Do you leave, donating the land to the Govt,
      workers, church, whomever. Does that negate item #3. Now
      then, assuming that neither of those groups are
      organized enough to run the ops, is that doomed to fail,
      and thus spread negative goodwill to CQB. Or is that
      a very (sneaky) way to help yourself out of a bad
      situation knowing the end result will not be beneficial to
      whomever you give the land to.

      5) if you stay, what
      do you do. Assuming that you need to basically start
      from scratch, where does CQB/DOL get the cash? Current
      ops? Do you apply for WTO/IMF/ relief loans that are
      arriving to assist in the rehabilitation of the country?
      If so, are you perceived as preying on the cheap
      financing that should be used to help the citizens (I'm
      just throwing out plusses and minuses here, no
      commentary of my own), even though you are the biggest
      employer(s) in the region, and the ONLY source of income for
      tens of thousands of people in the region. (directly
      and indirectly)

      6) Lets assume, that CQB
      already has potentially impaired assets on the books
      resulting from overpaying for banana lands in 89-91, as is
      evidenced by their continuing announcements of charges for
      "core asset redeployment", then would one assume, based
      on the Enquirer's stories of nominee ownership in
      Honduras, that some of that money is sunk in the San Pedro
      Sula area. Then are they forced to go back in, as they
      would have a hard time justifying the total amount of
      the write-off, above and beyond TRR?

      In other
      words is Honduras too big to fail? And if so, is it
      only for CQB and not for DOL or the other players? If
      it is only for CQB, then what does that do for CQB.
      Does that force them to rebuild the 10,000+ acres at
      Tela, and leave the other lands as a write-off?, or do
      they do it all? If so, what does that do to the
      volume/pricing scenario. What is the cost of the write off
      versus the cost of rebuilding, and could either one be
      more favorable than the other?

      Sorry for the
      rambling message, let's start some good discussion
      here.

      What are the upsides for CQB and/DOL?

    • Well, again, as Lazio stated it, let us not
      forget that while we are speculating on earning a few
      dollars, this has become an absolute catastrophe for
      people in the region. We should be more concerned about
      the setback these people are suffering.

      Some
      points to ponder:

      That AP article on pricing for
      bananas seems to not have a whole lot of support behind
      the statements. Yes there is/was an oversupply of
      bananas, but good lord, when CQB and DOL both say that all
      of Honduras is wiped out, that's a @%*! load of
      bananas stripped from the market. Surely at least 40MM
      boxes (and that's probably on the low end) Warshaw
      claimed that there may not be production in Honduras
      until 2000!!!!!!!!!!!!! Is this the first sign that CQB
      won't be there to harvest?

      If anyone has seen
      banana land after a major flood, you realize that not
      only do you lose the hanging crop, but the damage to
      the infrastructure is even more costly. How much
      would it cost to redig the primary and secondary
      drainage in La Lima? Could it even be justified in today's
      economy? You would basically have to recreate the
      plantation! Anybody care to guess what that would cost in
      today's prices. Start digging out those financial reports
      from the boom years, and we could possibly figure it
      out.

      if you suppose, as the Enquirer printed, that CQB
      actually owns the "independent grower" land through
      nominee owners, then what does that add up to in dollar
      cost of investment. Add that to the amount of the CQB
      owned land at Tela Railroad.

      Now, some scenarios
      come to mind.

      1) You don't rebuild. Too
      expensive. can't justify it in today's market (perhaps
      assuming no real change in EU quota conditions).

      2)
      you watch market conditions, get an idea of pricing
      volatility after the true impacts of supply and demand come
      to light. Then do you make a decision based on what
      your rebuild costs are.

      3) do you wait and
      watch to see if DOL or others rebuild or walk. If they
      walk, what do you do. Is there some risk (either
      politically or in terms of negative goodwill) to abandoning
      the ops when Honduras is most in need. Is that risk
      greater if you are first or last to leave the
      scene.

      More in part 2

    • Did you ever think that if this stock goes to 15,
      maybe there isn't anything wrong with it to provoke
      shorting? After all, the bad news is out. Go ahead short
      away. But read my post # 226 before you do.

    • I have to agree with Opt4stocks this is a GREAT
      short canidate.
      I am hoping it will continue to go
      up then short at 13-15 range.
      They are going to
      have a very hard time in the next 12 months.
      Good
      luck to all!

    • Good luck with this one. Hope you covered. I sincerely believe shorting this stock will not work with you (if you really did). Try again when it gets to $16.

    • First of all, I will not participate in the
      general downgrading of the atmosphere on this board, if I
      offended you, my apologies. My comments stand, and as has
      been mentioned many times before, there is not enough
      volume/float on this stock by individual investors (non fund)
      for ANY comments on here to influence any movement of
      this stock. Period. The Lindners control most of it
      and they can have a big impact, they have just chosen
      not to.

      My comments have been very clear that
      I am long in this stock, and continue to be.
      Nothing I have said would cause anyone to sell or short
      this stock, however I have stated the truth and if you
      don't like that, well I can't help it. Sorry if I seem
      to have a little more insight that might cause you
      to question your investment choice. My comments are
      for the most part objective and backed up with fact,
      and aren't the usual pump n dump or short seller BS
      that floods the message boards. I've been in this
      stock since before it hit 50 (1991) and I've ridden
      (averaged) it down along the way ever since.

      As for
      the votes cast, etc, you have to remember that all of
      the shares held in the employee benefit plans are
      voted in direct proportion to non-plan held shares
      voted. Add to that the shares held by upper management
      (Non Lindner family members) and you can come to a
      considerably higher number. Does that Lindner block include
      any/all shares held by the successor to American
      Financial Corp? That number seems quite low when I always
      remember that the Lindners
      directly/indirectly/beneficially owned or managed about 38% of the shares
      outstanding. For the record that is my shoddy memory and
      probably is not accurate. Maybe someone else can give us
      that exact percentage, family and AFC/AIG/A?? and all
      of the Trusts.

      As for liking Management, I'll
      tell you, I don't. Hagin is the best asset they have,
      Sims is VERY good, and the rest of Senior Mgt would
      have been tossed from any other company years ago if
      they didn't have such strong ties to the Lindners,
      especially Keith. Paz is still new to the organization, and
      it will be interesting to see how he does.


      Ask yourself this question: Considering the extremely
      high percentage of their total $$ production is
      sourced in 7 countries that are Spanish speaking, what
      percentage of Senior Management do you think can even speak
      Spanish? Now, how many members of Middle mgt? Do you see
      the problem? And this isn't gringo bashing, it's just
      that if you can't talk to the people who are rowing
      the boat, how can you steer it.


      I usually
      don't mention Senior mgt (or my views of them) on this
      board, but since you brought it up, there you have it. I
      still have little faith in their earnings announcements
      and financial statements, and Tim Ramey at Deutche
      Securities states the same thing every time he does a review
      of the company. That information is public and comes
      from a voice which DOES move markets, as opposed to
      this tiny little board.

      The other frequenters
      to this forum can add their comments, but nothing
      would make me happier (and richer) than if this thing
      went to the moon.

      Now, if you'd like to take
      this offline, we can take this to private email.

    • What DelMonte news reports are you reading?
      Wasn't there one today that mentioned a 10% banana hit
      and a $35 million charge to go with it?

      For
      the record CQBholder I'm no "company stooge" and I
      wonder if you'd show any better manners in person. I am
      however an owner of this and many other stocks and you're
      not doing me any favors. I'd like to see this
      business perform better, and so far this year it has. If
      you don't like management, as the book says, don't
      invest and leave it to the folks who do. According to
      the quarterly report this summer, the current board
      got 52.9 million out of 53.5 million votes cast. The
      proxy statement I got said the Lindners were only
      voting 24 million of them.

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CQB
10.32-0.10(-0.96%)Jul 10 4:01 PMEDT

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