The Oceana Group has struck a deal to sell its Commercial Cold Storage (CCS) business for R760 million after obtaining all the required regulatory approvals for the transaction.
A consortium comprising AIIM, a subsidiary of Old Mutual dedicated to infrastructure investment in Africa, Bauta Logistics, a specialist food logistics company operating in mid- and East Africa and Ntiso Investment Holdings, a strategic equity partner has purchased the CCC business, Oceana announced on Tuesday.
Oceana CEO, Neville Brink, said the transaction was complex in a challenging economy.
He said the conclusion of the sale was significant for the company because it will allow Oceana to invest in, leverage and expand its core business at a time when there is strong demand for affordable, healthy protein.
“It delivers on our strategic intent, which is to be a diversified fishing business in terms of the species we harvest, the geographies in which we operate and the products we sell. We will deliver this by investing and growing the three pillars of the business – Lucky Star canned foods, fishmeal and oil and wild-caught seafood,” Brink said.
Brink said the cash proceeds from the transaction will strengthen Oceana’s balance sheet by reducing debt, which was a prudent decision, given rising interest rates. He said this placed Oceana in a position to drive growth of its core fishing business.
CCS has six cold stores, five in South Africa and one in Namibia, of which three are owned and three are used on long-term leases. Total storage capacity is about 100 000 pallet spaces.
Oceana has entered into a three-year contract with CCS, to retain its relationship with the company as an independent provider of cold storage and handling services. The contract includes the option to renew after three years.
The group will also continue to provide agreed transitional services to CCS for a year until April 2024.
