Chiquita fights for its life

A trade dispute with the EU hit the bananan giant's bottom line

The banana and fresh fruit distributor Chiquita Brands International is preparing to hand over a large stake in the company to its creditors after having slipped into the red during a prolonged trade dispute.

Negotiations with debt holders aim to hammer out a restructuring plan that would involve the 131-year-old US company filing for bankruptcy protection.

Chiquita has been hit by losses of more than $1.5bn over the last eight years during a prolonged so-called "banana war" with the European Union over imports from former European colonies.

The company hopes to reach an agreement with its creditors on the restructuring of $841m of debts.

"What we were was a good company with a bad balance sheet and we hope to become, through this process, a good company with a good balance sheet," said chief executive Steven Warshaw.

The planned measures would dilute the existing shareholders' stake in the company.

Chiquita's shares have fallen about 50% this year. On Wednesday, the stock fell 9.65% to 75 cents.