Aker Seafoods splits in two

Shares of Aker Seafoods ASA (OSE: AKS) will be traded ex right to shares of Norway Seafoods ASA from today. Reduction date of Aker Seafoods’ share premium fund was yesterday. Aker Seafoods ASA will focus on harvesting activities with a fleet of over 10 trawlers. The main catch is North East Arctic Cod but other species such as haddock and saithe have been increasing in importance. Harvesting has been performing very well for the last few years and thus the more focused company is getting a good start.

Last October Aker Seafoods finally could present news on how to proceed in improving its poorly performing processing business. Norway Seafoods ASA becomes a whitefish processing company listed on the OTC list and owners of Aker Seafoods ASA are getting shares proportionally to their holding in the former joint company.

Aker Seafoods will retain close ties with the processing company through a 15-year Supply Agreement. The new Norway Seafoods has 9 primary processing facilities in Norway with over 50% of the filleting capacity in the country as well as processing facilities in Denmark and France and fish farms in France. Norway Seafoods’ annual revenues are north of 2 billion NOK but EBIT margins have been hovering around zero.

The group believes that European white fish processing is becoming more competitive in the international markets as China is losing its edge that has stemming from low labour costs. Until now Norway Seafoods has been focusing on the European market. Customers have been searching for more affordable purchases and new innovations are needed to keep up.

Aker Seafoods ASA recently signed an agreement for the extension of its main credit facility with a bank syndicate to a maximum amount of over 1.5 billion NOK with final maturity in September 2018. This has allowed the group to secure financing of its vessel construction programme as well as to ensure satisfactory financing for Norway Seafoods Group AS after the spin-off. Aker Seafoods is set to receive three new vessels from STX designed for whitefish and possibly shrimp catch in 2013-2014, helping to replace current aging vessels.