HB Grandi board approves Ögurvík acquisition

The board of directors of HB Grandi has approved the agreement to acquire the entire shareholding of fishing company Ögurvík ehf that was struck on the 7th of September, and has decided to put the matter to a shareholders’ meeting for its approval. The purchase price is ISK12.3 billion, based on the opinions of impartial assessors. Deloitte á Íslandi is producing a report on the acquisition, according to legal requirements concerning trading between linked entities and this will be presented to shareholders with the invitation to the meeting. The acquisition is subject to approval by the Icelandic Competition Authority. The acquisition is funded from cash reserves and with loans. The shares will be handed over on payment of the purchase price.

Ögurvík ehf is the company operating 2157gt freezer trawler Vigri RE-71 which was built in 1992. The company’s quotas for the quota year commencing on the 1st of September 2018 are 7680 tonnes of groundfish species and 1663 tonnes of mackerel, according to the 2018 allocation. Ögurvík has operated trawlers from Reykjavík for more than half a century, and Vigri is one of the largest quota holders in the Icelandic fleet. The company’s operating revenue in 2017 was ISK 2197 million, ISK 2160 million in 2016 and ISK 2193 million in 2015. The company’s EBITDA was ISK 348 million in 2017, ISK 366 million in 2016 and ISK 707 million in 2015.

The acquisition of Ögurvík broadens the basis of HB Grandi’s activities. The company’s quota holding becomes larger, particularly in high-value species such as cod, and the demersal quota increases from 48,000 tonnes to 56,000 tonnes. Opportunities are created for increased specialisation in catching and in shore-based processing. Production ashore of higher-value products will increase. This will make the usage of raw material and other products more streamlined and the company’s market position will be strengthened with increased production, not least in respect to Asian markets where demand is constantly growing. Prices for the company’s products have the potential to grow, alongside the profitability of catch quotas and investments in production. The acquisition of Ögurvík is in line with the company’s emphasis on catching and processing of products with higher market potential and to seek out more fertile and growing markets.

 

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