Barramundi Group’s sale of Australian assets fall apart

Barramundi Group’s planned sale of its Australian assets has fallen through after the buyer, Wild Ocean Australia, could not obtain the funding necessary to complete the deal.

The deal, announced in December 2022, called for Barramundi Group to sell a 75 percent stake in its Australian business for AUD 1.6 million (USD 1.1 million, EUR 1 million) initially, with an additional AUD 3.4 million (USD 2.30 million, EUR 2.16 million) to be paid if the company could secure at least four more seawater site leases in the Kimberley region of Western Australia.

“The transaction has not been finalized, as the buyer has not been able to attract the necessary funding. The business will now undergo reconstruction,” Barramundi Group said in a 24 May press release.

Barramundi Group has a 34-percent stake in Wild Ocean Australia, and would have retained an effective 50.5 percent economic interest in Marine Produce Australia (MPA) – the business name of its Australian operations – under the deal, which received approval from Barramundi Group’s shareholders in January 2023.

However, Marine Produce Australia has now had two voluntary administrators appointed to assess how the venture will proceed. Rob Kirman and Rob Brauer, turnaround specialists with the Melbourne, Australia-based advisory and restructuring firm McGrath Nicol, were appointed as voluntary administrators of the company.

“The Administrators are currently making an assessment of the MPA Group’s position with a view to undertaking a restructure or recapitalization of the MPA Group,” Barramundi Group said. “The administrators, with the support from the MPA roup’s management, intend to continue to operate the MPA Group on a ‘business as usual’ basis while exploring options for a sale and/or recapitalization of the MPA Group.”

Barramundi Group, which is based in Singapore and which operates barramundi farms in Singapore, Australia, and Brunei, was hit with a board exodus on 12 May, 2023. Johannes Cornelis Antonius den Bieman, Andreas von Scholten, Marit Solberg, and Sjoeberg Tristan Nenne resigned following the company's posting of continued losses. Von Scholten previously served as the company's CEO but was replaced in October 2022 by James Kwan. Two other board directors, Dato Seri Setia Haji Abdul Manaf bin Haji Metussin and Junaidi bin Haji Masri, were replaced on the company's board in October 2022.

In its unaudited 2022 results, the Singapore-based barramundi farmer posted a loss of SGD 19.7 million (USD 14.7 million, EUR 13.5 million). The company deal with a viral outbreak at its Semakau grow-out site in Singapore in December 2021, causing elevated mortalities through Q1 2022. And it said it dealt with "sudden and significant increases in key raw materials, cold storage and energy costs."

"While these increases were gradually fed through to end customers from the second quarter of 2022, there was a significant impact on our EBITDA-margin," the company said in its 2022 financial report. "In the second half of 2022, the group had successfully negotiated with its key customers to increase the selling price, to compensate for cost inflation. The net effect on margins however was still negative as increases in prices were achieved later in the year, lagging increases in costs."

Photo courtesy of Barramundi Group