Lending banks urgently seek investors interested in Avramar

Deloitte is looking for a solution to allow the uninterrupted continuation of the business activity in addition to the management of Avramar's debt, which amounts to EUR 450 million.
Avramar booth at the Seafood Expo Global 2023 in Barcelona. Photo: WeAreAquaculture.
Avramar booth at the Seafood Expo Global 2023 in Barcelona. Photo: WeAreAquaculture.

Mubadala and Amerra Capital Management, the responsible and current shareholders of the company are seeking urgent solutions to keep Avramar's operations afloat, reports Greek media Capital.gr. The lending banks have appointed Deloitte as an advisor to seek investors interested in buying it while trying to solve its short-term liquidity problems in order to maintain business activity. The survival of the fish currently housed in the Greek producer's farms is at stake.

In addition, the shareholders have also started a valuation process of Avramar's assets – fry and fish -. The task, which has been entrusted to a Norwegian company specialized in this field, will take approximately one month to complete. The total debt accrued on the loans amounts to approximately EUR 450 million (USD 480 million).

There is not much time left

According to information from Capital.gr, it seems that there are already potential investors interested, including a major U.S. fund. However, the main concern now is time. Avramar's main asset is the fish housed in its infrastructures, which require liquid funds and available capital for feeding and maintenance. Any delay or unforeseen event can have a decisive impact on the decline of the fish population. The survival of the company depends on the survival of the fish and it is therefore essential that procedures move quickly.

The time required to complete a possible transfer of Avramar to a new owner is estimated to take no less than 8 months, provided that an investor expresses interest immediately without requesting further details. If prospective buyers request further information and details of financial data, the final proposal process by one of them could be delayed considerably.

The shareholders will hand over the company to the banks

Like a dog chasing its tail, Avramar needs banks to open the financing channel to remain valuable. Without liquidity, the Greek fish producer will most likely face a shortage of fish, either because it will be forced to reduce its production or because it will have to harvest the fish earlier – which means selling smaller and lighter fish and therefore not finding a suitable place in the market.

It seems that the banks are going to grant a bridge loan of EUR 20-25 million (USD 21-27 million). However, this loan has two drawbacks. The first is that it does not seem that in the current circumstances of the company's indebtedness, this amount will be sufficient for more than two months. Secondly, according to Capital.gr, it has not yet been disbursed. In exchange for this financing, the shareholders will cede the company to the banks, a precondition for the change of management. The banks will then negotiate directly with potential investors.

Disagreement with the current management of the company

The banks' other condition is a change in the company's current management. The creditors consider that the team led by Thor Talseth, who was appointed CEO last year, has made the wrong decisions. Capital.org's information by Giorgos Lampiris says: "It is considered that so far unfortunate choices have been made with persons who did not have the required knowledge and experience to manage a fish farming group of Avramar's size and complexity at management level."

To solve it, contacts have already been established with executives with experience in the fish farming sector and with executives with experience in the food sector. In Greece, Avramar's problem is of concern even at the governmental level. The company is the largest fish farming company in the country and the fact that it sells or may sell fish below cost to obtain liquidity may cause distortions in the market.

About Avramar

Avramar is the largest aquaculture company in the Mediterranean, the result of the union under one name of four leading companies from Greece and Spain. With 10 hatcheries, 72 fish farms, 3 fish feed factories, 12 packaging facilities, 3 processing plants, and a global distribution network to more than 700 customers in over 30 countries, it has fully integrated the value chain. The company offers full traceability of its Sea Bass, Sea Bream, Stone Bass (Meagre), and Pagrus.

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