Cape Town, South Africa-based Oceana Group has announced the sale of its subsidiary Commercial Cold Storage Group Limited – traded as CCS Logistics.
The sale of its cold-storage business entity for ZAR 760 million (USD 42.8 million, EUR 43.2 million) will finance investment an expansion of its core business of fishing.
The business was purchased by African Infrastructure Investment Managers (AIIM) and its investment partners, Bauta Logistics and Mokobela Shakati, through a special purpose vehicle dubbed Commercial Cold Holdings. CCS Logistics has been a leading player in South Africa’s temperature-controlled logistics market for more than 50 years, and currently has about 100,000 pallets of storage capability across six facilities in Johannesburg, Cape Town, and Walvis Bay, Namibia. The purchase is still pending, as it is subject to regulatory approvals.
AIIM is itself a subsidiary of Old Mutual Alternative Investments, which is dedicated to infrastructure investment in Africa, while Bauta Logistics is a specialist food logistics company in the Middle East and Africa. Mokobela Shakati, meanwhile, is a strategic investment and empowerment partner.
AIIM intends to invest up to USD 150 million (EUR 151.3 million) in CCH, using a mix of equity and debt financing, “inclusive of the initial asset acquisitions as well as a pipeline of further acquisitions and greenfield development projects.”
“This deal is a win-win. The transaction offers good value for Oceana,” Oceana CEO Neville Brink said.
Brink said the deal strengthens Oceana’s balance sheet, “allowing us to focus on leveraging the scale and capabilities of our fishing and fish-processing operations.”
Brink said completion of the transaction will also give CCS Logistics “the access to capital it needs to remain competitive and grow.”
AIIM Investment Director Damilola Agbaje said securing proper cold storage is “critical” to improving infrastructure and guaranteeing food security in the region.
“CCS’ technical expertise and operational track record provides a crucial platform for regional expansion and securing strategic customer relationships,” AIIM Managing Director Olusola Lawson said. “Food security in the current global and African context is a topic of increasing importance, and we believe the CCH platform will play a role in addressing these critical matters."
Oceana has for some time considered CCS as a non-core aspect of its business, and it has therefore not been prioritized in terms of the group’s capital allocations. Oceana's board said in its August 2022 trading update. The company said the business’s performance was negatively impacted by a 5 percent decline in occupancy levels in August, with the Western Cape region experiencing lower import activity and excess market capacity.
Oceana’s fish imports through its affiliate, Lucky Star, represent between 15 to 20 percent of the cold storage company’s revenue, with the bulk of its business coming from third-party manufacturers, importers, and exporters.
In 2021, the company sold its Bayhead cold storage facility in Angola. The facility was operated by CCS and the company’s logistics division, and was sold due to a decline in sardinella resources in Angola, which in turn led Oceana Group to mothball all its operations in the country.
Photo courtesy of Oceana Group
