Clearwater Delays Privatization Plans


SeafoodSource staff

Published on
October 8, 2008

The Icelandic government's decision to put Glitnir Bank in receivership under control of the state prompted Clearwater Seafoods Income Fund yesterday to delay its plan to go private.

The move "created uncertainty as to whether or not [Glitnir] will be able to meet [its] commitment to provide approximately 10 percent of the financing required to complete the transaction," according to a Clearwater press release.

The Halifax, Nova Scotia, seafood company says it's "working diligently" with its shareholders and financing sources, including Glitnir, in an effort to close the deal by Oct. 31. However, the company "cannot guarantee that a suitable resolution will be reached or that the transaction will close."

Clearwater shareholders voted on Sept. 23 to sell shares back to the company for $4.50 per share. The move to privatize was first announced in August and is valued at up to $90 million. The vote would give CEO Colin MacDonald and his brother-in-law, John Risley, a controlling interest in the company.

But on Sept. 29, the Icelandic government announced that it planned to acquire a 75 percent stake in Glitnir for $859 million, but it never transferred any of the funds to the company.

The global credit crisis has crippled Iceland, and its government has taken control of the country's three largest banks: Kaupthing, Landsbanki and Glitnir.

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