Eimskip sells UK food and fish transport firm – Fishupdate.com

Eimskip sells UK food and fish transport firm Published:  18 June, 2008

THE big Icelandic seaborne fish carrier, Eimskip is writing off interest in its British subsidiary chilled and frozen food transport company Innovate Holdings – less than two years after taking control of the firm.

The current book value of the shareholding is 74.1 million euros, which will be fully written off in the second quarter and the Icelanders have begun a strategic review about disposing of Innovate’s assets.

According to Eimskip’s announcement, various alternatives will be evaluated to strengthen the company’s balance sheet.

Eimskip started to invest in Innovate in 2006 and one year later it became the sole owner of the company

Eimskip, which regular ships fish into the Humber, has in a relatively short period become one of the biggest global cold store services.

The acquisition of Innovate, along with the acquisition of the Canadian companies Versacold and Atlas, played a large role in that development.

According to an announcement from Eimskip, recent market conditions in the UK have proved increasingly challenging and the capacity utilisation of warehouse and transportation network assets has been lower then expected.

Therefore, Eimskip has chosen not to increase its investment in Innovate.

Eimskip’s Board of Directors, Stephen Savage, Stephen Dargavel and Peter Osborne, who were also the prior owners of Innovate, will step down from Eimskip’s Executive Board.

Eimskip has begun a strategic review of Innovate to divest all of Innovates assets and the sale process of Innovate is now in preparation in cooperation with Eimskip’s UK consultants.

Eimskip said in announcement: “As part of Innovate’s strategy, the company entered into long-term lease agreements for warehouses and transportation systems.

“However, recent market conditions have proved challenging, leading to lower than expected capacity utilisation of warehouse and transportation network assets.”

The statement added: “Furthermore, the company´s lease and financial costs have significantly increased and the losses in recent months have weakened the company’s financial position to such extent as to impact ongoing operations.

“Given the challenging economic outlook in the UK and following a detailed review by Eimskip’s Board of Directors in recent weeks, the Board chose not to increase our investment in Innovate and subsequently decided to write off Innovate’s assets and look for potential buyers.”

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