Oceana keen to 'hook' a big one

20 May 2013

Perennially profitable fishing company Oceana could be angling for an offshore acquisition.

The company, which recently reported a 46% hike in interim profits to R243m, has just renewed a cautionary notice that is rumoured to be linked to negotiations around acquiring control of the Australian operations of a Spanish fishing company.

Such a deal would greatly enhance the geographic mix of Oceana's earnings.

Oceana, which is by far SA's most diverse fishing company, has scant exposure in international markets - though the company does earn a fair dollop of export earnings from West Coast lobsters.

The company's best-known offshore business is the Glenryck canned pilchard operations in the UK.

Initially the speculation around the cautionary suggested Oceana was set to pursue a deal with hake specialist Sea Harvest (where Oceana BEE partner Brimstone is a major shareholder).

There was also talk Oceana may be looking to buy another hake specialist, I&J. I&J's parent, consumer brands conglomerate AVI, has endured persistent rumours that its fishing arm is up for sale (though Sekunjalo's Premier Fishing has also been cited as a suitor).

International deals

But the latest talk around the Cape Town docks is that Oceana is more likely to try its luck in international waters.

Though Oceana dominates the canned pilchard market with its Lucky Star brand and dabbles in various seafood sectors, further forays into local waters are limited by Oceana's disputed empowerment status.

Regulations currently discourage companies with a lower BEE ownership from taking over operations of companies with higher empowerment ownership.

Though Brimstone and a staff trust are major shareholders in Oceana, the company was recently denied approval to go ahead with the south coast lobster segment of a takeover deal clinched with Lusitania Fishing Group

One offshore possibility is that Oceana could be looking at making an offer for the Australian operations of troubled Spanish seafood conglomerate Pescanova. Such a deal should not faze Oceana's chief executive Francois Kuttel, who has previous experience in operating offshore fishing businesses.

With Pescanova fast taking on water under an overbearing debt load, the company could be looking to sell off certain operations to stay afloat.

Source: Financial Mail via I-Net Bridge

Source: I-Net Bridge

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