The Oceana Group Limited has announced that it is selling its Commercial Cold Storage (CCS) business for R760 million in a transaction that will enable it to invest in and expand its core fishing business.
Oceana Group said in a statement on Tuesday that the firm was being bought by a consortium comprising African Infrastructure Investment Managers (AIIM), a subsidiary of Old Mutual Alternative Investments dedicated to infrastructure investment in Africa; Bauta Logistics, a specialist food logistics company in mid and East Africa; and Mokobela Shakati, a strategic investment and empowerment partner.
“This deal is a win-win. The transaction offers good value. It strengthens our balance sheet allowing us to focus on leveraging the scale and capabilities of our fishing and fish-processing operations. It also gives CCS the access to capital it needs to remain competitive and grow,” Oceana CEO, Neville Brink, said.
He said the transaction would come as no surprise to anyone who knows the firm as CCS had been considered non-core for some time and had not been prioritised in terms of expansive capital allocation.
AIIM Investment Director Damilola Agbaje said there was opportunity to grow in the logistics sector. “The cold chain logistical infrastructure sector is underdeveloped and in places non-existent across sub-Saharan Africa and this investment diversifies AIIM’s current portfolio into a high-growth and high-impact area.”
CCS has six cold stores, five in South Africa and one in Namibia, of which three are owned and three are long-term leases. Total storage capacity is some 100 000 pallet spaces.
Oceana, mainly its Lucky Star fish imports, represents between 15% and 20% of CCS’s revenue, with the bulk of its business coming from third-party manufacturers, importers and exporters.
Brink said the firm would retain its relationship with the logistics company as long as service levels were maintained and rates remained market related. As part of the transaction, Oceana has entered into a three-year contract with the firm from the date of implementation, with an option to renew.
The parties aim to conclude the transaction by 28 February 2023, subject to regulatory approval. This includes approval from the competition authorities in South Africa and Namibia and the exemption or transfer of fish processing establishment rights in terms of the Marine Living Resources Act.
