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Publish Date : 25-Mar-2014

China Fishery Group Limited (China Fishery) declared that it has finally closed a series of transactions, which will significantly improves the Group’s capital structure and deployment.

The Group has inked a term and revolving credit facility agreement for US$650 million with an international bank consortium, which consists of China CITIC Bank International Limited, Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A. (also known as Rabobank International, Hong Kong Branch, DBS Bank (Hong Kong) Limited, Standard Chartered Bank (Hong Kong) Limited and The Hongkong and Shanghai Banking Corporation Limitedand.

With this new facility, the Group will get the opportunity to concentrate on consolidation and to raise the operational efficiency and effectiveness of its expanded operations. The facility holds a maturity of 4 years.

The group will utilise the proceeds to fund (i) the redemption of the senior notes of a total aggregate principal amount of US$250,000,000 issued on 10 February 2010 and 10 January 2013 by Corporacion Pesquera Inca, S.A.C. due 2017; (ii) the acquisition of all issued shares in the capital of Copeinca ASA by CFG Investment S.A.C. pursuant to an internal group restructuring exercise; (iii) the repayment or prepayment of the existing facilities of the Group; and (iv) the general corporate purposes of the Group.

Mr. Ng Joo Siang, Group Managing Director of China Fishery said, "The successful completion of our refinancing marks an important step in the enhancement of the capital structure of China Fishery. We have been able to reduce our average interest expense, effectively extend the maturity of our debt, and gain greater operating flexibility to deliver on our objectives. Our target is to achieve a debt to equity ratio of 75% in the next three years."

In addition, the Group has also decided not to renew one Long Term Supply Agreement and to cancel the three remaining Long Term Supply Agreements (LSAs) under its Contract Supply Business.

Mr. Ng said, "As we have been structuring our expanded Group for future growth and setting in place an improved capital structure, we have reviewed where we deploy our capital to best capture the opportunities before us. Transitioning to spot purchase of fish allows us to redeploy the significant capital tied up in pre-payments under the LSA’s towards reduction in China Fishery's gearing."

Accordingly, China Fishery will keep on buying fishery products from suppliers at spot market. As per the agreement with the Suppliers, the Group will receive upto US$80 million by the end of April 2014, and the remaining balance of approximately US$162 million will be returned by March 2016, either in kind as fish or, if mutually agreed, in cash.

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