Fishing group Oceana might be promoting its industrial cold storage (CCS) business to a consortium of traders in a R760 million deal, a transaction that it says will “enable it to invest and expand its core fishing business”.
The consortium of consumers features a subsidiary of Old Mutual Alternative Investments African Infrastructure Investment Managers (AIIM) , specialist meals logistics firm in mid- and East Africa Bauta Logistics and strategic funding and empowerment associate Mokobela Shakati, the group mentioned in a Sens assertion on Tuesday.
“CCS has six cold stores, five in South Africa and one in Namibia, of which three are owned and three are long-term leases. Total storage capacity is some 100 000 pallet spaces,” Oceana mentioned.
According to Oceana, the transaction ought to come as no shock to the market because the CCS business has been positioned on the backburner, having not been prioritised by the group for expansive capital allocation for a while.
“This deal is a win-win. The transaction offers good value for Oceana. It strengthens our balance sheet allowing us to focus on leveraging the scale and capabilities of our fishing and fish-processing operations. “It also gives CCS the access to capital it needs to remain competitive and grow,” CEO Neville Brink mentioned.
Read: Oceana sees efficiency restoration in H2
A troubled Oceana
The JSE-listed firm, which owns well-known tinned fish model Lucky Star, has in the previous few years battled some troubles marked by exterior investigations by monetary authorities, the precautionary suspension of its CFO Hajra Karrim and the resignation of CEO Imraan Soomra, to title a number of.
In May, the group introduced the departure of exterior auditor PwC who resigned from the function, citing a worrying lack of communication between it and the Oceana board.
In February, the Financial Sector Conduct Authority (FSCA) launched an investigation into the group’s affairs into what the watchdog termed as attainable publishing of “false, misleading or deceptive statements, promises and forecasts regarding the past or future performance of the company, or its securities.”
Before the investigation, the group had skilled delays in releasing annual monetary statements for the 2021 interval.
Read:
Oceana appoints Zafar Mahomed as CFO
Now PwC resigns as Oceana’s exterior auditor
Oceana CEO Imraan Soomra resigns with rapid impact
Oceana confirms FSCA investigation
Oceana stays linked to CCS
Despite disposing of the business, Oceana mentioned it’s going to proceed working with CCS as this varieties a part of transaction circumstances. The group has entered into a 3 12 months service contract with CCS from the date of implementation the place Oceana could have the choice to renew ought to it’s happy with CCS’s service ranges.
According to the group, its imports – primarily the Lucky star fish business – represents between 15% to 20% of CCS’s income, whereas the remainder emanates from third-party producers, importers and exporters.
Oceana can even present transitional providers to CCS for a 12 months following implementation. The group says it expects to conclude the sale by the tip of February 2023, topic to regulatory approval.
AIIM funding director Damilola Agbaje added that CCS will play a essential function in making certain the regional enlargement of the cold chain logistical infrastructure sector, which he believes is at the moment immature.
“The cold chain logistical infrastructure sector is underdeveloped, and in places non-existent, across sub-Saharan Africa and this investment diversifies AIIM’s current portfolio into a high growth and high impact area.”
“CCS’s technical expertise and operational track record provides a crucial platform for regional expansion and securing strategic customer relationships,” Agbaje mentioned.