Chiquita is set to file for bankruptcy under chapter 11 of the US bankruptcy code. The company reached agreements with its bond-holder committees on a restructuring plan that will reduce its debt and accrued interest by more than $700million and its future annual interest expense by $60m.

But the company stressed that it will be business as usual for customers and suppliers throughout the restructuring and bankruptcy processes.

'We are pleased to have achieved this important milestone in the restructuring initiative we launched in January,' said Steven Warshaw, president and ceo of Chiquita Brands International. 'This restructuring and the recent settlement of the US-EU banana trade dispute are both significant events that will reinforce Chiquita's prospects for strong revenue and earnings growth. Now that we have reached agreement with the bondholder committees, we are confident that we can complete the chapter 11 process within 90-120 days after we file our pre-arranged plan, giving the company a fresh start and a solid balance sheet.' Chiquita will issue 40m shares of new common stock upon completion of the restructuring. After the bankruptcy procedures are complete, a new seven-member board of directors will be elected. Warshaw is one of two directors who will remain in post.

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