Maruha Nichiro Corporation (hereinafter “the Company”) hereby announces that its consolidated subsidiary Peter Pan Seafoods, Inc. (hereinafter “PPSF”) has reached an agreement on transferring the fixed assets as follows.
- Reasons for transfer
PPSF has been processing and selling fishery products such as sockeye salmon and pink salmon from its processing factory in Alaska, U.S.A. for many years. However, in recent years, PPSF’s Alaskan salmon business has continued to experience operating losses due to factors such as, soaring raw fish prices due to the intensified competition, high costs due to poor catch of fish, and fall in production. The Company’s financial performance will not be expected to improve as the competition for raw fish materials is expected to intensify in the future. Under these circumstances, the Company intends to withdraw from the Alaska salmon business and has reached a contract to sell all PPSFowned factories, fixed assets and operations. The sale is scheduled to be completed on December 31, 2020, according to contract details.
The transferee plans to continue this business, and the Company will conclude a purchase negotiation agreement for the products and continue to handle PPSF products.
- Outline of Subsidiary
| (1) Name | Peter Pan Seafoods Inc. |
| (2) Address | 3015,112th Ave. NE, Suite 100, Bellevue WA. 98119 USA |
| (3) Capital Representative | Barry Collier, President |
| (4) Main Business | Processing and sales of Marine Fishery Products |
| (5) Capital | US$20,255,340 |
- Outline of Assets to be transferred
- Details of PPSF Business Processing and sales of (processed) marine fishery products form Alaska, U.S.A.
- PPSF: PPSF Marine Product Business Operating Results (for the year ending March, 2020- after elimination of intracompany transactions)
| PPSF Business (a) | 2Consolidated Results for the Year Ending March 2020 (b) | ratio (a/b) | |
| Net Sales | 15,765 million yen | 905,204 million yen | 1.7％ |
| Gross Profit on Sales | 802 million yen | 118,069 million yen | 0.7％ |
| Op. Income | -2,203million yen | 17,079 million yen | – |
| Ordinary Income | -2,340million yen | 19,901 million yen | – |
- Assets and Liabilities of PPSF Business Not open to public by non-disclosure agreement with other party.
- Transfer Price and Settlement Method
After finalizing the valuation of the book value of assets deducting the book value of liabilities, as of the end of December 2020, the transfer price will be determined and settled in cash, with the assumption that the full amount will be paid immediately after the contract is fulfilled. (The estimated price is not open to public due to the non-disclosure agreement with the other party).
- Contents of Transferred Assets
Processing Factory, other operations and properties in Alaska.
Loss on transfer US$27,900,000 (planned) (October 30, 2020 TTM 104.60 yen/ USD, Japanese currency amount: 2,918 million yen)
(Note) “Loss on transfer” includes various expenses such as advisory fees of US$ 1.9 million.
- Profile of Transferee
| (1) | Name | Northwest Fish Company LLC | |
| (2) | Address | 3015,112th Ave. NE, Suite 100, Bellevue WA. 98119 USA | |
| (3) | Representative | Rodger May | |
| (4) | Main Business | Processing and Sales of Marine Fishery Products | |
| (5) | Established | April 15, 1998 | |
| (6) | Main Shareholders and ratio | Alaska Fish Holding LLC (tentative name) 100% | |
| (7) | Relationship with the Company and PPSF | Capital Relationship | N/A |
| Human Relationship | N/A | ||
| Trading Relationship | Sales Records to the Company in the last fiscal year. | ||
| Applicability to related parties | N/A |
- Profile of Investors of Alaska Fish Holding LLC, the parent company of the Transferee
(The following two companies will both acquire 50% share of the above transferee company.)
| (1) | Name | May Holding Company | |
| (2) | Address | 4317 S 188th St. Seatac, WA 98188 USA | |
| (3) | Representative | Rodger May | |
| (4) | Main Business | Sales of Marine Products | |
| (5) | Established | October 29, 2020 | |
| (6) | Main Shareholders and ratio | Rodger May 100% | |
| (7) | Relationship with the Company and PPSF | Capital Relationship | N/A |
| Human Relationship | N/A | ||
| Trading Relationship | N/A | ||
| Applicability to related parties | N/A |
| (1) | Name | McKinley Capital Management, LLC and affiliated companies | |
| (2) | Address | 3800 Centerpoint Drive, suite 1100, Anchorage, Alaska 99503 USA | |
| (3) | Representative | Robert A. Gillam, CEO | |
| (4) | Main Business | Investment Firm | |
| (5) | Established | March 11, 1991 | |
| (6) | Main Shareholders and ratio | Capital Relationship | N/A |
| Human Relationship | N/A | ||
| Trading Relationship | N/A | ||
| Applicability to related parties | N/A |
- Schedule for Transfer
| (1) | Contract Conclusion | October 31, 2020 |
| (2) | Date of Asset Transfer | December 31, 2020 (planned date) |
(Note) Dates shown are in U.S. Pacific Time
- Outlook for the future
As a result of the transfer of this fixed asset, an extraordinary loss of 3 billion yen will be accrued. The impact of this transfer will be recorded on the consolidated results for the second quarter of the year ending March, 2021, which will be announced today.
Furthermore, the amount of capital (after deducting liabilities) generated from the transfer is expected to be about 4 billion yen. The Company will consider using this for new investments and further improving management efficiency in the future.
