‘China ratings safe’

Global rating agency Moody's says that China Fishery Group Limited's takeover bid for Peru-based Copeinca ASA will not have any immediate impact on its B1 corporate family and senior unsecured debt ratings, and its negative rating outlook.

On 26 February 2013, China Fishery said that it made an offer to acquire Copeinca ASA for NOK53.2 per share, or US$9.5 per share in cash. The offer values Copeinca ASA at $556 million, assuming 100% acceptance by shareholders of the offer price.

The offer is conditional on the company obtaining a minimum ownership of 50.01% in Copeinca ASA, along with the required approvals from authorities and shareholders.

Moody's does not expect the current proposed takeover offer for acquiring Copeinca ASA has an immediate impact on China Fishery's financial and liquidity positions, says Alan Gao, a Moody's Vice President and Senior Analyst. In the scenario that China Fishery takes up 100% of the shareholdings of Copeinca ASA, its debt leverage measured by debt/EBITDA and EBIT/interest would reach 3.2x, a level that will still support its B1 ratings.

To fund the deal, China Fishery aims to raise US$278 million in equity through a rights issue and US$295 million through a bridge loan, and which will ensure that its liquidity position is unaffected by the deal. Given the track record of good access to bank and capital market, Moody's expects China Fishery has the ability to refinance the bridging loan if the takeover is successful.

On the other hand Dyer Coriat Holding and Weilheim Investments, which collectively holds 36.8% interest in Copeinca ASA, does not plan to accept the offer based on an announcement by the board of directors of Copeinca ASA on February 27, 2013.