Dole sells land as higher banana costs in Europe begin to bite

Dole Food, one of the world's largest marketers of fresh fruit and vegetables, is selling off assets in Hawaii and California in order to avoid defaulting on US$350m in bonds, according to reports from Bloomberg News.

The California-based company is understood to be raising the money following increases in European Union banana tariffs and shipping costs, which are said to have hampered the company's ability to repay debt.

The company, which reported total revenue of US$7bn for 2007, has elected not to pass on the tariff increase to its customers as it bids to increase its 12 per cent share of the EU market, mainly at the expense of its rival Chiquita.

"They're aggressively selling assets and they're working opportunistically to refinance their 2009 maturity," Suzanne Trepp, an analyst with Western Asset Management, told Bloomberg. "We all know that in a worst-case scenario there are deep pockets involved here, too, but that's not even on the table right now."

Dole had earlier agreed to sell 2,000 acres in Hawaii for about US$39m, according to federal filings. The company owns 28,000 acres of pasture, forest and farmland in Oahu and relies on less than 3,000 acres of that land for pineapples, coffee and cacao, the report said.

Land in California and a business unit operating in the flower trade worth a combined US$76.2m combined may also be sold, the company said.