Chinese shrimp specialist Zhanjiang Guolian Aquatic Products has announced the annulment of a memorandum of understanding between it and a Saudi sovereign investment fund.
Last summer, Guolian announced a USD 560 million (EUR 515 million) tie-up with the Saudi Arabia Public Investment Fund (PIF) that would have given it access to various lines of credit. PIF, which in June 2023 acquired a 42 percent stake of National Aquaculture Group (NAQUA), a major Guolian supplier, is flush with cash from Saudi oil sales on prices driven higher by Russia’s invasion of Ukraine.
Guolian made the termination announcement in a note to investors, saying the two sides had been unable to agree on terms.
“After the signing of the agreement, the two parties actively communicated on follow-up cooperation, but so far, the two parties have not formed any substantive formal agreement; now, based on the actual situation, both parties have agreed to terminate the agreement through consultation,” it said in a 20 March 2024 announcement.
On 30 January 2024, Guolian announced 2023 forecasted losses between CNY 360 million and RMB 480 million (USD 50 million and USD 66.7 million, EUR 46 million and EUR 61.4 million), up from a loss of CNY 7.6 million (USD 1.1 million, EUR 972,000) in 2022. It reported operating income between CNY 4.9 billion and CNY 5.3 billion (USD 680.6 million and USD 736.2 million, EUR 626.7 million and EUR 677.9 million) and made an asset impairment loss provision of CNY 245 million (USD 34 million, EUR 31.3 million). Sunnyvale Seafood Corporation, Guolian’s U.S. subsidiary, suffered an operating loss of approximately 70 million (USD 9.7 million, EUR 9 million) in 2023.
“In 2023, the aquatic products industry was affected by complex and changeable domestic and foreign macroeconomic situations and changes in downstream consumer market demand,” it said. “Affected by the epidemic, market competition has become increasingly fierce, and the market conditions for vannamei shrimp, crayfish, etc. have continued to be sluggish, and product sales have declined.”
Guolian’s share price, though, recently received a boost after the company received an ...
