The sale process for the largest two Greek seabass and seabream aquaculture companies, Nireus and Selonda, continues to be delayed, taking a toll on both of the companies' performance in the past year, and their ability to battle Turkish producers' rock-bottom prices.
US private equity fund Amerra Capital and a UAE-backed subsidiary of investment firm Mubadala reached a deal to acquire and merge Nireus and Selonda in 2018, but 15 months later, the takeover has not been finalized.
The transaction was intended to clear the way for the Amerra-Mubadala takeover. Amerra Capital and Mubadala are already exposed to the sector, having acquired seabass and seabream giant Andromeda in 2016, which produces in both Spain and Greece.
Delay extending the pain
Amerra and Mubadala's investment thesis is the consolidation of the seabass sector can yield major synergies.
But while that plan sits on the shelf, the two groups are struggling. Selonda's revenues fell 7 percent in the first half of 2019 compared to the same period last year, to €73.5 million ($80.5 million), mainly due to declining prices. The trend has similarly impacted Nireus: the group more than doubled its losses from last year to €12.3 million ($13.5 million) in the first half of 2019 compared to 2018.
Volumes of seabream sold plummeted 28 percent and prices went down 3 percent, while the average price for a whole fish fell 7.5 percent in the first six months of this year compared to last year.
Volumes of seabass sales, meanwhile, increased 18 percent, but prices fell 12.2 percent compared to last year.
As a result of the financial crunch, Selonda has been forced to take on two new loans worth €19.2 million ($21 million), Kathimerini reported.
In the first half of the year, the company received 60 percent of that amount from its four banks and key shareholders.
Selonda received the other 40 percent in the beginning of the second half of 2019, causing the company to go through significant cash flow issues.