Maruha Nichiro has announced it has sold its U.S. subsidiary Peter Pan Seafoods to entrepreneur Rodger May and McKinley Capital management, resulting in a USD 27.9 million (EUR 24 million) loss for the company.
In a notice “regarding the transfer of fixed assets of a consolidated subsidiary of the company,” Maruha Nichiro announced that it reached an agreement for the sale of the Alaska-based processing factory, to be completed on 31 December. The exact price that May paid for the company will not be disclosed.
The sale comes after Peter Pan posted significant operating losses for the year ending in March 2020. According to Maruha Nichiro, the company had an operating loss of JPY 2.2 billion (USD 21 million, EUR 18 million) on sales of JPY 15.6 billion (USD 150 million, EUR 128 million).
Peter Pan had been struggling for multiple years, and was not expected to see improvements, the company stated.
“PPSF’s [Peter Pan Seafoods] Alaskan salmon business has continued to experience operating losses due to factors such as soaring raw fish prices due to the intensified competition, high costs due to poor catch of fish, and fall in production,” Maruha Nichiro said. “The company's financial performance will not be expected to improve as the competition for raw fish materials is expected to intensify in the future. Under these circumstances, the company intends to withdraw from the Alaska salmon business and has reached a contract to sell all PPSF-owned factories, fixed assets and operations.”
As a result of the sale, Maruha Nichiro said, an “extraordinary loss of JPY 3 billion [USD 28.6 million, EUR 24.6 million] will be accrued.” The amount of capital expected to be generated from the transfer, the company added, is “about JPY 4 billion (USD 38.1 million, EUR 32.87 million).
The sale comes Maruha Nichiro posts its financial results for the second-quarter, indicating significant losses in sales. Sales for the second quarter of the year ending March 2020 were JPY 415 billion (USD 3.9 billion, EUR 3.4 billion), down 7 percent year-on-year. Profit attributable to owners of parent was also down 55 percent to JPY 11.9 billion (USD 113.6 million, EUR 97.6 million).
