Carlyle to take 13.6% stake in China Fishery

This will result in Carlyle holding 13.6% of the fishing company’s enlarged share capital.

China Fishery Group, prior to this deal, appears to have been somewhat cash-strapped, having cancelled a first and final dividend payout last year post the GFC. Its announcement in January of a secondary listing on the Oslo BORS in Norway by May 19 – subsequently extended – hints at the same thing.

The funds raised from Carlyle will provide China Fishery with capital to make further strategic investments in the global fishing industry, while improving its operational efficiency. The company specializes in the harvest and on-board processing of anchovies along the Peruvian coast into fish meal for farmed fish and livestock. China has the world’s largest fishmeal market.

For Carlyle, industry sources say, the attraction is expanding its exposure to mainland China’s food supply chain, where increasing affluence is driving demand for a better and more broadly diversified diet. The lion’s share of China Fishery’s revenues (75%) continues to be generated from sales in the mainland market, despite much-increased marketing worldwide. AVCJ industry sources confirm that food and agriculture investments all along the value chain from produce markets to restaurants, seeking to tap China consumer demand, are a favored target right now, with the Blackstone Group, Capital International, Warburg Pincus and Atlantis Investment’s $600 million commitment to PRC agricultural markets operator Dili Group Holdings in March as just one instance.

Carlyle’s focus on this strategy is further evidenced by China Agritech’s recent announcement of a $10 million cash injection from the exercise of common stock warrants held by Carlyle Asia Growth Partners IV LP and CAGP IV Co-Investment

Patrick Siewert, a Carlyle senior director, commented publicly on the deal, saying, “We believe China Fishery will make good use of the expansion capital and our value-add to establish itself as a reliable and responsible supplier of fish products to the global market. We have a long-term commitment to the company and will partner with their management to grow their business and to further advance their corporate social responsibility commitments, particularly to set higher standards in sustainable practices for the industry.”

HSBC acted as Carlyle’s financial advisor, while UBS AG advised China Fishery

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• Topics
• Southeast Asia
• Greater China
• Expansion
• Consumer
• The Carlyle Group
• Patrick T. Siewert
• Warburg Pincus Asia
• Capital International
• The Blackstone Group