American seafood sale will strengthen Icelandic Group, say senior executives Published: 23 November, 2011
THE sale of Icelandic Group’s US seafood operations to the Canadian company High Liner Foods for $230-million last week will strengthen the financial position of the Reykjavik based organisation, chief executive Finboggi Jonsson has said.
Under the terms of the deal (predicted by Fishupdate last month) Icelandic Group will continue to own the Icelandic Seafood brand. High Liner will have the right to use the brand in the United States, Canada and Mexico for the next seven years. In addition, High Liner Foods has entered into a long-term distribution agreement with Icelandic Group on the purchase of Icelandic marine products to ensure that producers in Iceland will continue to have the same access to the U.S. market as they do today.
Mr Jonsson said: “The sale of the Icelandic Group´s operations in the United States and related businesses is the final step of a strategic process that the owners and managers of Icelandic Group have been working on all this year. Our goal has been to strengthen the financial position of the Group and sell manufacturing units that hold little strategic value for the Icelandic fishing industry. This sale together with the sale of assets in Germany and France earlier this year, means that the Group has now divested itself of assets in the total amount of approximately ISK (Icelandic kroners) 41 billion this year, out of which ISK 21 billion have been paid for by assumption of debts. We will use the remaining cash to lower the Group’s debts further and to return part of the initial investment to the pension funds and other owners of the Enterprise Investment Fund.
Group chairman Herdis Fjesldsted added: The sale of the U.S. operations is an important step for Icelandic Group and in line with the strategy presented by new owners earlier this year. We have been focused on streamlining the Group’s operations, reducing debt, increasing profitability and minimizing risk in the operations. Services to Icelandic producers are an important element of our operations, and our distribution agreement with High Liner will ensure continued access for Icelandic producers to the North American markets. No less importantly, the agreement ensures that all marine products sold under the Icelandic Seafood brand will continue to meet the strict quality standards as before, a core reason for the brands strong market position.