April 7, 2008

Financial concerns on Icelandic Group increases

Icelandic Group, a large seafood producer with key operations in Britain, is facing financial difficulties, according to financial experts. 

The Group has agreed to submit a motion to shareholders at this month's annual meeting to authorize the company to loan around EUR 41 million (US$64.3 million), with a four year maturity at a fixed annual rate of 23 percent, according to the Glitnir Bank and seafood specialists.

The aim of the loan is to reduce the proportion of short term financing in the company's total funding, which according to Glitnir, points at the survival fight that Icelandic Group is currently going through. The company has performed badly and its debts have piled up, added Glitnir.

Icelandic's financial results for 2007 were less than cheerful, with sales falling by more than 5 percent, and the fourth quarter earnings were down 8.5 percent. There were also increased operating losses, and the company had undergone a number of boardroom changes in recent months.

The Group's chief executive, Finnbogi Baldvinsson, acknowledged the bad results but stated his belief that things will turn around by next year. He had also said the Group intended to increase the share capital by EUR 30 million (US$47.1 million), but it has now been dropped for the loan instead.

Icelandic supplies a wide range of fish and value added seafood products to major retailers such as Marks & Spencer and Tesco. The group also has key production sites in Europe, the US, Japan and Asia, with some of them reporting losses.