Sea Harvest to buy all of Viking Fishing

SEA HARVEST shares rose nearly 8 percent on the JSE yesterday after the fishing company said it had entered into negotiations to acquire the entire business of Viking Fishing for an undisclosed amount.

The shares closed 7.79 percent higher at R12.45 on the JSE yesterday after Sea Harvest, which is 54 percent owned by Brimstone Investments, said it was leading a consortium of broad-based black economic empowerment (BBBEE) investors who wanted to buy the Viking Fishing business.

The company said it was also in line to acquire a 51 percent majority stake in Viking Aquaculture.

Sea Harvest is the leading frozen fish brand in South Africa in retail, with a 36.7 percent market share, and food service. It has strong consumer loyalty and brand equity.

The group said the proposed transaction was subject to a number of conditions such as the satisfactory completion of a comprehensive due diligence of Viking Fishing and Viking Aquaculture.

“The Minister of Agriculture, Forestry and Fisheries or his/her delegated authority at the department granting the necessary approvals for the unconditional transfer of the fishing rights to the respective members of the B-BBEE consortium,” the group said.

It said the Competition Commission must give the proposed acquisition an unconditionally nod for the transaction to go through.

Sea Harvest has managed to raise R1.33 billion with 42 percent floated at a trading price of R12.50 a share when the group listed in March. It made its first acquisition in August by acquiring a freezer trawler, MV Therney, for R181 million from an Icelandic fishing company, HB Grandi.

Sea Harvest has invested more than R300m in the past three years in vessel acquisitions and factory upgrades to enhance margins and create a world-class asset base.

Last year, Sea Harvest used some of the capital to acquire 56 percent of Australia-listed Mareterram for nearly R250m.

Sea Harvest has a fleet of 29 vessels, 18 of which operate in South Africa, mainly on hake, and 11 in Western Australia, fishing for Shark Bay king and tiger prawns.

The company’s fleet fishing from Saldanha Bay consists of four freezers and eight fresher trawlers.

In the six months to the end of June, Sea Harvest delivered headline earnings of R111m, which was 217 percent higher than the R35m reported last year. The group said it benefited from the improved performance of its South African operations as a result of investments in both fleet and land-based operations and continued strong global demand for Cape Hake.

Group revenue increased 25 percent to R1.06bn, compared with R845m last year. The acquisition of a controlling interest in Mareterram in July last year playing a major role in the improved earnings.