Nueva Pescanova’s owner, Abanca, is reconsidering a sale to Iberconsa after issues arose in Cooke's ongoing due diligence process as part of its own planned acquisition of the company.
Cooke’s offer for Nueva Pescanova, originally in the range of EUR 150 million (USD 165 million) plus the assumption of EUR 500 million (USD 552 million) in liabilities in exchange for 80 percent of Nueva Pescanova, valuing the company at EUR 800 million (USD 875 million), has been cut to EUR 50 million (USD 54.7 million) plus a capital injection of EUR 200 million (USD 218.8 million), El Confidencial reported, citing several sources with knowledge of the negotiations.
However, Cooke Vice President of Public Relations Joel Richardson told SeafoodSource Cooke has not revised its offer to Abanca.
"Contrary to recent press reports, Cooke has not completed its due diligence investigation of Nueva Pescanova, S. L. nor has it delivered a revised offer to Abanca," he said in an email.
Richardson declined a request from SeafoodSource to answer additional questions on the state of negotiations.
"Cooke will not be offering any further comment on the status of the transaction," Richardson wrote.
El Confidencial previously reported Redondela, Pontevedra, Spain-based Nueva Pescanova’s earnings before interest, taxes, depreciation, and amortization (EBITDA) fell to EUR 20 million (USD 21.7 million) in 2022, down from EUR 80 million (USD 86.8 million) in 2021, and its operating profit dropped from EUR 70 million (USD 75.9 million) in 2021 to EUR 40 million (USD 43.4 million) last year. But it reported on Friday, 16 June the company’s EBITDA was actually EUR 12 million (USD 11 million) in 2022, weighed down by the cost of fuel and lower sales due to inflation. Cooke’s alleged lower offer also reflected the result of its due diligence process uncovering structural problems and questionable payments and income claims, according to the Spanish newspaper.
The issues are related to Nueva Pescanova subsidiary Camanica, a shrimp-processing operation in Chinandega, Nicaragua, with 1,000 employees and an annual capacity of 9,100 metric tons, as well as Nueva Pescanova’s fishing operation in Africa, according to El Faro de Vigo.
A Cooke spokesperson told El Faro de Vigo on 13 June that "Cooke Inc. and Abanca continue to advance in the negotiation process with the aim of reaching an agreement for the acquisition of a majority position in Nueva Pescanova.”
"As a family-owned seafood company, we take great care to ensure that all aspects of the business are fully evaluated,” the spokesperson said. "The parties are working together in a responsible manner to ensure that the due diligence is carried out thoroughly."
Even though it has entered a period of exclusive negotiations with Cooke, according to El Confidencial, Abanca is now reevaluating a competing offer from Vigo, Spain-based Iberconsa, which is owned by U.S. investment fund Platinum Equity, and which was previously reported to be out of the bidding. Nueva Pescanova urgently requires EUR 300 million (USD 328.3 million) to meet loan repayment requirements, and Abanca is facing regulatory pressure to sell a majority of its 98 percent stake in Nueva Pescanova.
However, buffeted by similar headwinds – higher oil prices and lower sales due to inflation – Iberconsa is also faces a maturing debt of EUR 300 million, according to El Confidencial.
Nueva Pescanova’s situation is further complicated by the pending departure of its CEO, Ignacio González. González, who has received credit for turning around the fortunes of the company after a messy bankruptcy, backed the sale to Cooke in April.
“He thinks it is going to be a good deal,” Nueva Pescanova Global Chief Marketing, Innovation, and Communication Officer Miguel Angel González Ezquerra told SeafoodSource. “A big part of it is he expects the company to remain in Vigo and that’s why I think Abanca is also keeping a part of the company, to ensure it remains in Vigo.”
In an interview with El Faro de Vigo, González expressed pride in the progress the company made during his tenure as CEO.
“We rebuilt the company's reputation, providing it with governance and compliance worthy of a listed company,” he said. “I'm sure I was wrong, many times, and I apologize for it, but I always kept the company in mind and in my heart. I have been immensely happy [at Nueva Pescanova]. I am leaving the most exciting professional project of my life.”
González said Pescanova’s brand name remains strong globally and that it is well-built for future success, no matter who ends up taking over ownership.
“This company, whatever it is in the future, has to be coherent with what it has achieved and with its history, it cannot want to be something else. The company's model is for the future,” he said. "If [the sale] goes well, which I'm sure it will, I can always say that I did my bit to get it back."
Photo courtesy of Sergio Rodriguez_photo/Shutterstock
