Oceana in deal with former chief
Former Oceana Group CEO Francois Kuttel will soon be responsible for landing the catches for the fishing group’s operations in the US.
On Friday Oceana confirmed that Kuttel, who resigned as Oceana CEO in February, would pay $31.5m for a 75% stake in Louisiana-based Westbank.
Oceana holds the remaining 25% stake in Westbank, which catches fish for its Daybrook fish oil and fish meal subsidiary.
US regulations on ownership in the fishing sector precluded Oceana from acquiring the majority stake in Westbank.
Kuttel, who is a US citizen, acquired the stake via Makimry Patronus. Kuttel’s emergence as a potential owner of Westbank initially caused some ripples in the market, but Oceana has been quick to give the assurance that the agreement with Kuttel was the most prudent option.
Daybrook has access to all the Gulf menhaden species caught by Westbank for an initial term of 30 years.
Westbank is headquartered near New Orleans, close to the mouth of the Mississippi River where there is an abundant Gulf menhaden resource. The company operates a fleet of 11 vessels that can carry 500-million tonnes of harvested fish.
With Kuttel being a related party, the company said that an independent committee followed a robust and transparent process that gave proper and careful consideration to all the bids received.
But Bradley Preston, chief investment officer at Mergence Investment Managers, raised a red flag. He pointed out that Kuttel was getting vendor financed into 75% of Westbank to the tune of $30.7m and had to contribute $800,000 in equity.
Preston said that Westbank could increase its catch fee by 2.5% and cause a R14.5m per annum increase in costs of sales to Daybrook. "Despite the fact that they ran a transparent process through an independent committee … it really looks like the former CEO is getting a very favourable deal from Oceana."