Sea Harvest to snap up additional shares in Viking Aquaculture for US$11.2M

SOUTH AFRICA – Sea harvest, a seafood and aquaculture company in South Africa is set to acquire another 28% in shares in Viking Aquaculture, an abalone and oyster producer, for ZAR210 million (US$11.2M), according to a statement released on March 8^th.

The acquisition increased Sea Harvest’s ownership stake in Viking Aquaculture from 54% to 82%, leading to the integration of Viking Aquaculture’s operating structure, growth strategies and funding requirements to those of Sea Harvest.

Sea Harvest Group initially acquired a controlling stake in Viking Aquaculture back in 2018.

This is a move, on the Group’s part, to strengthen its position in the sustainable fishing and high-value aquaculture sectors in the country.

Viking Aquaculture has farms operating in the Western Cape and the Northern Cape which are reported to collectively produce about 500 tonnes of abalone every year. The company also has two oyster farms in South Africa and Namibia.

“These high-value, high-margin aquaculture species are sold in Far East markets in live, dried, canned and frozen formats,” said Sea Harvest in the statement.

As per the terms of the deal, Sea Harvest anticipates paying ZAR28 million (US$1.55M) for the acquisition on March 15^th along with additional five-year instalments of ZAR42 million (US$2.258M) each year, scheduled to start from January 1, 2024, and ending on January 1, 2028.

Sea Harvest will also acquire any consolidated liabilities from Viking Aquaculture.

On December 31, 2022, the consolidated statement of the financial position of Viking Aquaculture reflected liabilities exceeding assets by ZAR106 million (US$5.71M).

The consolidated loss after tax attributable to the company for the financial year ended December 31, 2022, was ZAR32 million (US$1.72M) as well.

Sea Harvest communicated that it would buy the stake for cash, disclosing that it would use a combination of money and available banking facilities for the purchase.

Viking Aquaculture has been consolidated into the Sea Harvest Group’s condensed financial statements for the year ended December 31, 2022.

According to the group, the attributable net asset value consolidated into its condensed statement of financial position as of December 31, 2022, included property, plant and equipment, biological assets, and inventories.

It also included trade and other receivables, trade and other payables, deferred taxation and borrowings.

A few days ago, the company released its financial report for the year 2022. It announced to have increased its revenue by 27% to R5.9 billion (US$317M) despite describing 2022 as one of the most financially challenging years of the decade.

These challenges were on account of inflationary pressures, soaring fuel costs and a reduction in the company’s fishing rights.

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