The Financial Supervisory Authority of the Central Bank of Iceland has granted Samherji Holding an exemption from a mandatory bid obligation in shipping company Eimskipafélag Íslands hf. (Eimskip) in light of the economic uncertainty brought by the the COVID-19 pandemic.
“Given the current situation across financial markets, both in Iceland and the world, the conditions for exemption in the Icelandic Act on Securities Transactions are fulfilled,” Samherji stated.
On 10 March, it was announced that Samherji Holding, a company affiliated with Icelandic seafood company Samherji, had extended its shareholding in Eimskip by 3.05 percent, thereby increasing its ownership in the company to 30.11 percent.
At that time, Samherji Holding confirmed plans to send other Eimskip shareholders takeover bids. By law, this was required within four weeks. On 20 March, it requested an exemption from the takeover obligation citing “the unique circumstances” that had arisen in the financial market due to the spread of COVID-19.
“The Financial Supervisory Authority believes, given the circumstances of this case, that this decision guarantees the interests and protection for minority shareholders in Eimskip,” the company wrote. “Finally, the Financial Supervisory Authority draws attention to the fact that according to the Act on Securities Transactions, Samherji cannot make a takeover bid for six months from the date the company requested exemption.”
Samherji Holding CEO Björgólfur Jóhannsson said the current financial landscape made a takeover bid unwise.
“There are currently extraordinary conditions in the financial market. We did not believe it was wise to issue a takeover bid in the current turmoil, but we all hope that the situation will be better later,” Jóhannsson said. “Like we have stated before, our belief in Eimskip’s future has not changed.”
Founded in 1914, Eimskip achieved net earnings of EUR 1 million (USD 1.1 million) in 2019, down from EUR 7.4 million (USD 8.1 million) in the previous year. Annual revenues totalled EUR 679.6 million (USD 743.7 million), a decrease of 1.4 percent compared with 2018.
At the end of March, Samherji confirmed that Thorsteinn Már Baldvinsson has returned to the company as co-CEO with Jóhannsson.
Baldvinsson has been tasked with helping guide Samherji through the coronavirus crisis, while Jóhannsson is in charge of implementing a new corporate governance and compliance system.
Jóhannsson is also assisting the ongoing internal investigation into alleged bribery within Samherji’s Namibian activities. This investigation is due to be finalized and reported to the Samherji board of directors and relevant authorities later this spring.
Meanwhile, Samherji's managing director of ships operations, Kristján Vilhelmsson, has written to the crews of its fishing vessels, advising them that the fresh seafood markets have changed drastically in just two weeks, with exports of fresh fish only about a quarter of what they were before the COVID-19 pandemic began.
“The current situation is something never before seen and far from what we have ever imagined would happen. We can only hope that this will be over as soon as possible,” he wrote.
Crews are asked to stay at sea and to continue to fish for as long as possible “in some sort of quarantine” as this will reduce the likelihood of transmission, Vilhelmsson wrote.
“How long that time will be is entirely up to the crew; this is a new idea that came up as an experiment in the fight against this pandemic and seemed to make some sense. We are aware that this is not easy for many and maybe especially because it is not a tradition to take many tours in a row without going ashore in between trips,” Vilhelmsson wrote. “With this setup, we believe there is an increased likelihood that you will be able to keep the vessels longer in operation and thus your income.”
Samherji has also made changes to its fish processing to reduce the likelihood of transmission, including reducing its operations by almost a half. Only 50 percent of its staff are working at the same time, with employees coming in every other day.
“Samherji's goal is to do what is possible to keep employees safe from infection while protecting their jobs at the same time. It is only possible with a synchronized effort,” Vilhelmsson wrote. “This way, we believe we can return to normal operations when the pandemic is over, and no customers overseas will have forgotten us.”
Photo courtesy of Samherji
