Icelandic Group Announces Restructuring Plans
Icelandic Group's board of directors will meet on Nov. 11 to decide whether the investment firm Eignarhaldsfélagid IG will acquire a majority stake in Iceland's largest seafood company, which has been hit hard by the global credit crisis.
The company announced on Tuesday that it will submit a motion to reduce its share capital by an amount equal to its cumulative losses, followed by another motion to increase share capital from Eignarhaldsfélagid, which is controlled by "stakeholders in the seafood industry."
According to Icelandic, the share capital increase will allow the company to cut its interest-bearing debt substantially. Consequently, Icelandic's equity ratio will be about 30 percent.
"Strengthening the company's balance sheet is a pre-requisite for its strong operations, based on the effective turnaround we have achieved in recent quarters," says Icelandic Chairman Fridrik Jóhannsson. "It is vital for the company to command and demonstrate its strong financial position in uncertain times like these, when credit is tight. Icelandic Group's revenues originate for the most part abroad - an important consideration at a time when Iceland needs to maintain as strong an inflow of foreign currency as possible."
"Icelandic Group's management has worked untiringly on restructuring the company's operations recently, both through divestment of assets and reorganization of its manufacturing and marketing units," adds Icelandic CEO Finnbogi Baldvinsson. "As our strong market position gives good opportunities to expand, having a solid financial basis to work from is crucial. Following these changes, our employees, customers, suppliers and other partners around the world can maintain their confidence in Icelandic's operations, despite the current difficulties in Iceland and on international financial markets."