CNFC buys debt-racked Chinese tuna firm
Low tuna prices and a heavy debt burden have forced a leading Chinese fishery firm into the arms of a larger rival, in what could be the first in a round of consolidation in the crowded Chinese distant-water sector.
CNFC Overseas Fishery Co., China’s flagship state-owned fishery company, has acquired the local longline tuna firm Zhejiang Fenghui Distant Water Fishery Co for a cash payment of CNY 58 million (USD 8.23 million, EUR 7.45 million). The firm was valued by CNFC at CNY 108 million (USD 15.3 million, EUR 13.9 million) with debts of CNY 50 million (USD 7.1 million, EUR 6.42 million).
Fenghui claims to operate seven trawlers, according to filings to China’s Companies Office, which state the firm was set up in 2005 in Hangzhou.
The takeover will “consolidate the company’s leading position in the pole-and-line sector,” according to a statement from CNFC to investors.
CNFC operates more than 250 fishing vessels – most of them trawlers – and extensive global processing operations and transportation facilities in the Atlantic Ocean, Indian Ocean, Pacific, and Southern oceans. Formerly known as the China Fisheries Joint Company, in the mid-1980s, the firm started to sail into African waters and found great success there. Today, it has fishing vessels and docking facilities in almost a dozen nations, including Morocco, Senegal, Nigeria, and Gabon.
The company is blaming low prices for its tuna catch as well as losses at subsidiary firms for its poor performance thus far this year. The firm incurred a slide of between 82 percent and 77.6 percent in its profitability in the first three quarters of 2019, but is projecting profits of CNY 11 million to CNY 13.5 million (USD 1.54 million to USD 1.89 million, EUR 1.41 million to 1.73 million) for the first nine months of 2019.
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