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The chair of Sealord Group says there may be little it can salvage from its Argentinean subsidiary, Yuken SA.
Matanuku Mahuika says the poor state of Argentina’s economy and an unrealistic exchange rate means returns from the company’s catch of hoki and hake haven’t kept up with rising costs.
He says Sealord has been trying to sell the business since it was forced to become the sole owner in 2009.
Iwi shareholders have been told Sealord will take a hit of up to $35 million on its balance sheet if it walks away, but Mr Mahuika says it’s time to stop sending good money after bad.
"The nature of the quota we have in Argentina is you use it or you lose it. It forces you to fish the stuff. That requires you to maintain an operation and if you have an operation that is losing money, it puts you in a difficult situation. The boats are flagged in Argentina and it’s a complex and bureaucratic process getting them out and you can spend more money keeping those boats active or getting them out of there than they are worth," Mr Mahuika says.
Sealord wants to find a buyer for Yuken so it is not left with any future liabilities, but it will walk away if it can’t do a deal within a month.
Copyright © 2013, UMA Broadcasting Ltd
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