JSE LISTING PLANNED
Sea Harvest aims to raise R1.5bn
Black-owned fishing company Sea Harvest — which delisted from the JSE in 2000 – is aiming for a return to the bourse late next month and hoping to hook new shareholders through a large private placement.
Enduring empowerment group Brimstone Investment Corporation – which is the controlling shareholder of Sea Harvest — on Wednesday confirmed speculation in Business Day and Financial Mail around floating its fishing subsidiary.
Brimstone CEO Mustaq Brey disclosed that Sea Harvest – a hake specialist that also controls the Australian Stock Exchange-listed seafood business Mareterram — would look to raise a hefty R1.5bn in new capital via a prelisting private placement.
Sea Harvest was first listed on the JSE in 1993, but was delisted seven years later when the then controlling shareholder Tiger Brands bought out minority shareholders.
Sea Harvest will be the second fishing company listing on the JSE in 2017, with African Empowerment Equity Investments recently confirming the listing of subsidiary company Premier Fishing.
At the moment the JSE only hosts a single dedicated fishing listing in form of Oceana Group, which has a market capitalisation of almost R16bn.
Consumer brands conglomerate AVI also has exposure to the fishing sector through I&J.
Sea Harvest will use the R1.5bn private placement proceeds to settle about R300m of debt on its balance sheet and retire preference shares and loans worth R575m that are owned by Brimstone.
Brey said the balance of the capital raised would be mobilised for new growth opportunities both locally and abroad.
"We are looking to do a few things in the fishing industry."
Brimstone first invested in Sea Harvest in 1998 with an initial 10.76% interest. Today Brimstone holds a commanding 85% having acquired shareholdings from Tiger Brands and later fellow empowerment group Kagiso. Brey said Brimstone’s long association with Sea Harvest was an example of enduring empowerment.
"Real empowerment is about sticking with your key investments through thick and thin…."
In the past few years Sea Harvest, now headed by Felix Ratheb, has recorded sound growth with almost 60% of its revenues generated in hard currencies — mainly from markets in Europe and Australia.
In the year to end-December 2015 Sea Harvest generated operating profits of R114m from turnover of R1.365bn. Bottom line profits were R43m.
Since taking outright control of Sea Harvest in 2009 Brimstone has invested about R776m in the business — most notably in new vessels and plant efficiencies as well as acquiring a 56% controlling stake in Mareterram last year.
Brimstone chairman Fred Robertson stressed the proposed JSE listing would not see Sea Harvest losing its black ownership credentials.
Brimstone will still own about 52% of the company
postlisting. Robertson said Sea Harvest was energised and poised for growth.
Vunani Securities small to mid-cap analyst Anthony Clark said it was an opportune time for Brimstone to list Sea Harvest.
"They can adjust their stock price accordingly, depending on whether Premier Fishing opens at a premium or attracts a modest market rating."
Clark believed Sea Harvest’s strong black ownership credentials meant the company could be well placed to gain additional quota in the 2020 fishing rights allocation process.