Sealord acquires new funding

Thursday 5th January 2012

Sealord, which was forced to tap shareholders for funds to repay debt in 2010, has secured a new $190 million bank facility with longer terms, giving it greater leeway to meet future repayments.

The fishing company, jointly owned by Maori interests through Aotearoa Fisheries and Japan’s Nippon Suisan Kaisha, entered into a new loan agreement with its existing banking syndicate in November, according to holding company Kura’s financial statements lodged with the Companies Office.

In 2010, Sealord borrowed some $69.9 million from shareholder Nippon to help meet $172.9 million of debt that matured that year to its then-syndicate made up of ANZ, HSBC and Rabobank. Its 2009 accounts were tagged by auditor Ernst & Young because of its reliance on continued bank support.

The shareholder loans were made in two tranches, with some US$50 million due in November of this year and a further US$10 million maturing in January 2019.

The new funding line is made up of a $30 million three-year working capital facility and a $160 million five-year multi-currency facility with ANZ National Bank, the London branch of Australia and New Zealand Banking, Bank of New Zealand, Bank of Tokyo and Rabobank. That refinanced two tranches of the previous facility worth $73.5 million as at Sept. 30 which were due for repayment this month and a further $59.9 million coming due in January next year.

The 2011 financial statements showed Sealord reduced bank debt by $14.3 million to $133.4 million in the 15 months ended Sept. 30 and cut its shareholder loans by $9.1 million to $78.5 million. Still, finance costs rose for a third year, up to $14.8 million in the 15 month period compared to $9.7 million in the 12 months ended June 30, 2010.

Though the fishing company managed to retire some of its debt in the period, the ratio of net debt to total capital increased to 37 percent in 2011 from 35 percent a year earlier as its cash reserves dwindled and the value of its equity shrank. The group aims to keep the ratio between 25 percent and 40 percent, having widened the target from a range of 20 percent-to-35 percent a year earlier.

Sealord reported a profit of $20.6 million in the 15 month period, compared to $18.4 million in the 12 months ended June 30 2010. It changed its reporting period during the year to match the fishing season.

Including unrealised changes in fair value, the fishing company made a loss of $3.5 million compared to a profit of $13.7 million in the previous year.

Sealord resumed dividend payments, returning $16 million to shareholders after it retained its earnings in 2010.

BusinessDesk.co.nz

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