China Fishery Group

Substantial Shareholder, Carlyle Group, subscribed its Right entitlement, 113,513,514 Shares @ S$0.34.
Percentage held remain @ 11.09%.

Show of confidence?

Some new developement in the M&A space..

May 6, 2013, 2:05 pm
Undercurrent News
The Norwegian parliament looks set to approve Cermaq’s planned rights issue to fund its acquisition of Copeinca, making Marine Harvest’s bid for Cermaq less certain, reported the Norwegian financial daily, Finansavisen.

In the acquisition entanglement of Marine Harvest, Cermaq, Copeinca and China Fishery Group, the Norwegian government — specifically the industry minister Trong Giske — hold the deciding card.

The Norwegian parliament is due to vote on Cermaq’s proposed NOK 2 billion rights issue on May 14, a week before Cermaq’s annual shareholder meeting of May 21.

A no-vote could derail Cermaq’s bid to take over the fishmeal producer Copeinca, as the acquisition is contingent on parliamentary approval. That said, Cermaq’s CEO Jon Hindar has said it would explore all options to carry out the deal.

A no-vote would also leave Cermaq open to Marine Harvest’s takeover bid of NOK 105 for Cermaq. The bid, which Cermaq’s board has opposed, is conditional on Cermaq shareholders not approving the Copeinca acquisition.

Giske has not issued a comment yet on whether he will ask parliament to back the transaction. However, two parties, the socialist left party and the center party, have spoken out against Marine harvest’s bid, while Giske, before Marine Harvest entered the scene, had spoken out in favor of the acquisition of Copeinca.

Nearly all should become known on Tuesday, when the parliamentary industry committee is due to issue its recommendation. Parliament is expected to most likely vote in line with the committee’s decision, said Finansavisen.

and Marine's harvest offer was rejected..

Marine Harvest has sent an open letter to the shareholders of Cermag, following its announcement that it intends to present an alternative to the acquisition of the Peruvian fish meal company Copeinca.

But the Marine Harvest bid has been rejected by Cermaq's board, which believes the offer "significantly undervalues Cermaq and does not reflect the synergies that Marine Harvest underlines".

Cermaq's acquisition of Copeinca is to be considered at the Cermaq AGM on May 21 and is to be finance through the issue of new Cermaq shares.

This is fishy business - v capex heavy and regularly asking for shareholders to chip in.

Moreover with global warming, fish population will dwindle and hence harvest will decline and directly impacting bottomline.

Given Up

For those vested and interested...

(not vested)

China Fishery Group settles Copeinca share dispute

OSLO – Singapore-listed China Fishery Group has raised its stake in Peruvian fish feed maker Copeinca to 74.3 per cent from 65.3 per cent after settling a dispute with a Peruvian investor who had refused to sell, Copeinca said in a statement on Friday.

China Fishery Group has been seeking to buy shares from Peru’s Veramar Azul through a call option and has threatened the firm with arbitration over its failure to honour the option.

The firms have now reached a settlement and Veramar has transferred its shares, putting China Fishery Group one step closer to completing its takeover of Oslo-listed Copeinca.

http://www.todayonline.com/business/chin...re-dispute

It doesn't sound good for the company, amid the refinancing effort...

(not vested)

China Fishery facing rating risk as anchovy buy boosts debt

SINGAPORE -- China Fishery Group, the biggest anchovy-quota holder in Peru following its acquisition of Oslo-listed Copeinca, may be downgraded after the buyout sent its debt levels soaring, the Bloomberg news agency reported.

The Singapore-listed Hong Kong-based company is seeking to refinance an about US$355 million (S$450.3 million) bridge loan which part-funded the purchase and is due to be repaid at the end of the month, according to Moody’s Investors Service. Although yields on China Fishery’s bonds are falling, Moody’s put its B1 rating, four levels below investment-grade, on review for downgrade on Feb 12, citing the lack of a binding deal with lenders.
...
http://www.todayonline.com/business/chin...oosts-debt

However, China Fishery is in a business with fairly stable cash flow and limited competition due to licensing. Unless consumers' taste were to change, they shouldn't find it hard to refinance in today's environment.

Q2 result just out…..
http://infopub.sgx.com/FileOpen/CFGL-2QF...eID=296513 [result announcement]
http://infopub.sgx.com/FileOpen/CFGL-2QF...eID=296514 [press release]

After reviewing the group B/S and the commentaries, my gut feel is simply "EXTREME CAUTION" is justified here, because of very high gearing (gross total debts: USD1.253b), huge deferred tax liability (USD309m), and many potentially 'problematic' assets - prepayments to suppliers (USD241.5m), advances to suppliers (USD40.5m), other receivables & prepayments (USD233.9m), fishing & plant permits (USD1222.7m), etc.

As a corollary, I suppose the same word of "EXTREME CAUTION" is justified as well for listed immediate parent Pacific Andes Resources Development Ltd, which has also just released its Q2 result…..
http://infopub.sgx.com/FileOpen/PARD-2QF...eID=296516 [result announcement]
http://infopub.sgx.com/FileOpen/PARD-2QF...eID=296517 [press release]

Good morning everyone.

<not vested><not a call to buy or sell>

Copeinca Bondholders Snub ‘Futile’ Consent as Deadline Looms

http://www.bloomberg.com/news/2014-09-16...looms.html

Hot stocks: China Fishery, Pacific Andes dive on news of rights issue

11 Feb12:04 PM
INVESTORS dumped stocks of China Fishery Group and its largest shareholder Pacific Andes Resources Development Ltd on Wednesday on news that China Fishery will undertake a rights issue of up to 1.7 billion new shares priced at 17.3 Singapore cents apiece... http://btd.sg/1DgH0RS

China fishery ($0.185) - Maybe time to re-explore in this fishy company after issuance of right issue.. At this price, all negative news might have been factored in.. Good Luck....