Galician bank Abanca has acquired a majority stake in Redondela, Spain-based Nueva Pescanova and declared it will make changes at the vertically integrated seafood firm to improve profitability.
Abanca bought an additional 39.8 percent of the company from Banco Sabadell and Caixabank, bringing its total ownership stake to 80.46 percent, giving it control over the company.
In a press release, Abanca signaled it is investing for the long-term, seeking to rebuild the financial strength of a company it deems “fundamental” for the fishing-centric economy of Galicia, the northwesternmost region of Spain.
“The bank will strengthen the company's financial structure to enhance and grow its business project,” it said. “Abanca's plan includes strengthening the company's financial structure and its main areas of corporate and commercial activity. To do this, it will strengthen the best corporate governance practices and apply improvements in the field of management, all with the aim of strengthening its competitive position and promoting its growth.”
Abanca said it plans to return the company’s management to Galicia – most of its recent board meetings had been held in Madrid, according to Expansión – and find “an industrial partner that allows building a long-term value project from Galicia,” it said.
Galician newspaper La Voz de Galicia estimated the cost of the acquisition at EUR 175 million (USD 192 million), though Abanca did not confirm that amount. That values Nueva Pescanova at EUR 385 million (USD 422.5 million). Nueva Pescanova hit record sales 2019 at more than EUR 1.1 billion (USD 1.2 billion), but suffered a difficult 2019, with losses estimated at up to EUR 50 million (USD 54.9 million), according to CincoDías, citing forecasts contained in a Deloitte report for Nueva Pescanova commissioned by Abanca. The report found a drop in Chinese demand to be a leading cause of the loss. In 2018, Nueva Pescanova had just over EUR 1 billion (USD 1.1 billion) and recorded a profit of EUR 5.4 million (USD 5.9 million).
CincoDías reported Abanca will invest EUR 50 million (USD ) into helping finance the construction of four new fishing vessels that will be based in Mozambique, and three additional vessels fishing in Namibia.
Abanca has gradually increasing its holding in Nueva Pescanova from 5.5 percent to 40.5 percent over the previous three years.
Photo courtesy of Nueva Pescanova