Norebo buys FEST Group, strengthening its quota holdings

Published on
November 23, 2021
Norebo has acquired FEST Group, supplementing its position as the country’s largest fishing company by fishing-quota tonnage.

Murmansk Russia-based Norebo has acquired FEST Group, supplementing its position as the country’s largest fishing company by fishing-quota tonnage.

The FEST Group, also based in Murmansk, owns the Northern Fleet Co., which operates the SC Eridan, JSC Strelets, and JSC Taurus fishing companies. The companies collectively caught 150,000 MT of cod, mackerel, pilchard, herring, haddock, poutassou, and flatfish in the Barents and Norwegian seas, waters near the Faroe Islands, Greenland, Morocco, and the open waters of the Atlantic Ocean in 2018, according to Vedomosti.

The business journal’s report on FEST, which relied on anonymous sources, said FEST’s combined catch dropped to 150,000 MT in 2020, and that it holds combined quotas totaling 80,000 MT. The three companies recorded RUB 9.12 billion (USD 122.8 million, EUR 109.1 million) in revenue and RUB 2.42 billion (USD 29.4 million, EUR 27 million) in net profit in 2020. 

Norebo, which controls 420,000 MT of pollock, cod, and haddock fishing quotas in Russia, caught 618,000 MT of fish in 2018, according to Vedomosti. Forbes has reported the company’s 2020 sales at RUB 60.8 billion (USD 810.8 million, EUR 721 million). It said in a press release the Northern Fleet’s fishing firms “will be managed separately,” indicating they won’t immediately be folded into Norebo’s own operational structure.

The sale may have been precipitated by a Russian law passed in 2007 that prohibits foreign companies or individuals from owning majority shares of Russian seafood companies. Northern Fleet Owner Yuri Prutkov and his family have both Russian and Maltese citizenship, and in 2018, Russia’s Federal Anti-Monopoly Service (FAS) attempted to force the Prutkovs to sell their 81 percent share in FEST or reduce their stake. However, the Prutkovs were successful in their legal argument that a second passport did not violate the law in question.

However, in the past year, Russian President Vladimir Putin signed into law amendments to the legislation that further reduces the permitted share of foreign ownership in domestic seafood entities from 50 percent to 25 percent. Those whom the law affected were given a transition period of 365 days to reduce their shareholding or to sell their stakes, or to receive a permitted exception to the law.

Neither Norebo nor FEST Group provided details on the terms of the acquisition. However, in 2018, Kommersant cited numerous industry sources in placing a market price on FEST Group at USD 350 million (EUR 311 million). At the time, Kommersant reported the Russian Fishery Company (RFC) was interested in buying FEST’s assets, reportedly offering USD 110 million (EUR 97.8 million) for the assets, though a deal was never consummated.

Photo courtesy of FEST Group

Reporting from Saint Petersburg, Russia

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