“In light of the competitive fresh produce market conditions, we are assessing the new Dole’s capital requirements and other possible near-term funding resources, such as Dole’s Hawaii land holdings,” continued Mr. Carter. “Potential investments could include increasing the number of fresh fruit farms owned and operated by the new Dole, and required updating of our owned vessel fleet, which has an average age of 21 years.”
After the consummation of the ITOCHU transaction, Dole will retain six refrigerated container vessels, ranging in ages from 14 to 24 years, as well as seven break-bulk refrigerated vessels, ranging in ages from 19 to 27 years. Three of the break-bulk vessels will continue to be used by the Asia Fresh produce business following completion of the ITOCHU transaction, under a ships usage agreement between Dole and ITOCHU. Dole also has four other break-bulk refrigerated vessels under a charter arrangement which will terminate at the end of 2013, and are currently under sub-charter to a third party, and a fifth vessel under charter that is scheduled to terminate in June 2013, subject to possible extension.
The new Dole will also retain approximately 24,700 acres in Hawaii on the Island of Oahu, of which approximately 16,500 acres are listed for sale. Dole farms pineapple, coffee and cacao on approximately 2,900 acres, and has an additional 1,800 farming acres which are not currently in production. The remaining 3,500 acres comprise gullies, washes, and other natural non-productive land. Dole currently estimates the relatively short-term monetization of the approximately 21,800 acres of land that Dole is not currently farming, to be in the $175 million to $200 million range. This range, which exceeds the current net book value for this land, is based on a recently completed internal assessment confirmed by a nationally recognized commercial real estate services firm.