Iceland Seafood International (ISI), a leader in the seafood industry, has confirmed the sale of 100% of the share capital of its subsidiary IS UK to Espersen A/S, a Danish value-added seafood producer with significant market reach in the UK. Espersen A/S has successfully completed its due diligence, and the transaction documents are in the final stages of completion. The deal is set to close in September, making Espersen A/S the sole owner of IS UK.

Property and Assets Included in the Deal

As part of the agreement, property, equipment, and machinery from IS UK will be sold to Iceland Seafood Barraclough, a wholly-owned subsidiary of ISI. These assets will then be leased back to IS UK. Specifically, a leasing agreement for the property and an equipment hire purchase agreement for machinery have been finalized. According to ISI’s balance sheet as of June 30, 2023, the valuation of these agreements has resulted in a total impairment of fixed assets amounting to £7.1 million.

Financial Implications and Equity Adjustments

Upon completion of the transaction, ISI will convert existing intercompany loans into equity and inject additional equity to balance out negative equity and cover operational losses through the end of the year. The book value of this equity injection will total £0.3 million. According to the terms of the sale, the sales price for the 100% share is £1,000, resulting in a sales loss of £0.3 million for ISI.

Estimated Impact on ISI’s Financials for 2023

The sale is expected to have a negative impact on ISI’s Profit & Loss (P&L) and equity for the year 2023, estimated at £15.0 million. This includes the first 8 months of negative operational results, £7.1 million from the impairment of fixed assets, £1.32 million of inventory write-offs, and the £0.3 million sales loss from the share capital.

This significant transaction not only reshapes the ownership of IS UK but also highlights the dynamic changes occurring within the seafood industry. The deal provides Espersen A/S with an expanded footprint in the UK market while enabling Iceland Seafood International to streamline its operations.

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