Facing liquidity crunch, Avramar's lenders push for sale
Paiania, Greece-based Avramar may be sold if its ongoing debt problems cannot be resolved, according to media reports.
Formed in 2020 through the merger of Andromeda Group, Nireus, Selonda, and fish feed producer Perseus, united by funding from U.S.-based company Amerra Capital Management and Abu Dhabi’s Mubadala Investment Company, Avramar has EUR 450 million (USD 480 million) in outstanding loans, according to Capital. Since 2018, when the two entities purchased Nireus and Selonda, they have invested EUR 200 million (USD 214 million) into Avramar, but with neither willing to sink more funds into the firm, Avramar has been forced to use bridge loans to fund its operations, and interest rates on those loans are high and rising.
Now, the banks that have lent significant funds to Avramar have hired Deloitte to explore a potential sale of the company. Deloitte, in turn, has hired an unnamed Norwegian firm to conduct a valuation of Avramar’s assets, according to Capital. The process is geared toward not interrupting the firm’s ongoing operations,
Avramar had 70,000 metric tons of production of sea bass, sea bream, stone bass, and pagrus across all its Greek and Spanish farms in 2022, and had EUR 500 million (USD 534 million) in sales and earnings before interest, taxes, depreciation and amortization (EBITDA) of around EUR 45 million (USD 36.3 million), according to Business Daily. The company’s infrastructure and brands – including 12 hatcheries, more than 70 sea-farm sites, three feed plants, and a number of packaging and processing units – were valued at EUR 303 million (EUR 324 million) in 2021, with its fish stocks adding EUR 24 million (USD 25.6 million) in value, acording to Business Daily.
In April 2023, El Confidencial reported Avramar was straining to meet its financial obligations to its primary lenders– Alpha Bank, Piraeus, Eurobank, Ethniki, and Attica Bank – and had been selling its fish in the Spanish and Italian markets at a loss in order to generate capital needed to remain solvent. It also reported Avramar had retained Houlihan Lokey to assist it with a restructuring intended to aid the company with its debt problems.
In a statement released 25 July, the company denied it had breached any of its loan covenants.
"All present loans are being serviced normally and in accordance with existing agreements,” it said. “In a period where market and macroeconomic conditions are demanding, there are well-intentioned updates and discussions with the banks, as we do at regular intervals. Moreover, based on careful market analysis, we have developed a new business plan that optimizes our operational efficiency thus ensuring the long-term success of Avramar. Avramar has two shareholders Amerra Capital and Mubadala Investment Company. There is no discussion of a new candidate investor.”
Capital reported an American equity fund has expressed interest in acquiring Avramar, but that any sale will take at least eight months to complete. Additionally, it reported the Greek government has a keen interest in ensuring the firm remains solvent, given it is one of the largest seafood companies in the country.
Photo courtesy of Avramar