Newbie888,

For the last 3 months the consensus has been a BUY call and for those who have bought HOLD.

Recommendation

Chinese demand pulling lobster prices up, stretching supply

Demand from Asia has rescued North America from a glut of supply, although its effect has not been positive across the board in Maine and Canada

 

• Lobster on 35% more US menus in 2013 compared to 2009
• Red Lobster faces $30m increase in shrimp costs
• Lobster poised for strong season start

This could well explain why Chinese fund Fosun would pay $950m for Diamante .... potential growth. CF is definitely worth $1

Peruvian paiche farmers calling investors to unlock economic potential

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• Marubeni guilty plea came from scheme to pay bribes to Indonesian officials
• Copeinca bondholders hope for payout from China Fishery
• Peru&rsquo s foreign currency income from shrimp exports at 10-year record
• Check your mobile phone to confirm catch size is legal in Peru
• Pacific Andes ends Russian pollock supply deals in $750m debt refinancing

March 28, 2014, 2:47 pm

Victor Jimenez

Peruvian farmers of the Amazonian fish  paiche  (arapaima gigas) are fighting frustration as nascent companies in the sector  believe  they sit on one of the strongest profits sources in Latin American aquaculture, but lack sufficient promotion and  access to capital.

Speaking to  Undercurrent News,  one such company, Acuicola Los Paiches, said the fish could become a complement to  households' best-liked species  like salmon, trout or tuna.

" This is a business in a development stage, we have yet to consolidate our markets, and levels of exports can be considered as trials rather than proper trade activity. However, our only disadvantage is that consumers  have never heard about  the product. The challenge for investors is to be able to see that this is a fish  with vast growth potential," said Isaac Gherson, manager at Los Paiches.

Gherson confirmed his group has decided to engage with well-known chefs and food distributors as a private company. He also feels the sector should throw its weight in, too.

" This fish deserves a higher place in the food chain, and governments of countries where it can be harvested should support the industry, from Brazil, Peru and Colombia to Bolivia."

Paiche are grown in purposefully created ponds in the Amazon rain forest where they are fed pellets made from Peruvian anchovies without other animal by-products. They breed naturally and are grown at low densities. The ponds are continuously flushed with fresh, clean water from the Amazon, and the fish can reach up to 18 kilograms.

Whole Foods in the US was selling this fish at $12.99 per pound this week. Its main supplier, Artisan Fish, also agreed that chefs could be the key to awake the curiosity of ordinary shoppers.

" Initially, it is a fish no one really knows. When chefs get involved, because they like it, then they recommend it, and that' s the kind of connection we must make to kickstart this business," Artisan Fish' s CEO Adrian Burstein recently told local media.

The national fishing society of Peru SNP already noted that paiche today is a niche market, which could afford it a trampoline-like base to expand further.

" The technological processes in this case may prove very important, and for that, we need the universities to investigate jointly with companies and other institutions so the sector can produce to wide-market levels. Paiche is an interesting case," said Elena Conterno, president of SNP, this week during a visit to the province of Oapampa.

At 90,000 metric tons, Peru' s aquaculture production in 2013 showed the country has some way to go before competing with neighbors like salmon producer Chile, with 630,000t, or shrimp producer Ecuador' s 270,000t.

The affirmation follows an improvement of China Fishery's business profile after its acquisition of Copeinca ASA (Copeinca, 'B+'/Stable) making it the leading anchovy fishmeal producer in Peru. Its recovery of the prepayments for the long-term supply agreement (LSA) in Russia has also addressed the risk of suffering substantial losses in this investment in the event of negative regulatory influence on its contract supply business.

Risk to its operations remains as the full repayment of the LSA prepayment will only conclude by April 2016. China Fishery's fleet performance has also been erratic since it started operating in 2011. Finally, the outlook can be stabilised only after the company has deleveraged and achieved an adjusted net debt/EBITDAR of below 3.0x.

KEY RATING DRIVERS

Strengthened Business Profile: Fitch estimated that the Peruvian fishmeal segment will be contributing close to 80% of China Fishery's EBITDA after the termination of the LSA. The is because the contract supply business will become a spot purchase business with very thin trading margins and this segment used to contribute about 65% of China Fishery's EBITDA. Although the change reduces China Fishery's earnings diversity, it can lessen the uncertainty posed by regulatory changes that may result in substantial losses in this operation. The refocus of China Fishery's operations to Peru is also a positive given the firm demand for fishmeal, which is a staple needed for aquaculture globally.

This is evident in the strong price increases of Peruvian fishmeal and fish oil as a result of significantly lower total allowable catch (TAC) for Peru anchovies for the fishing season starting in November 2012. Prices of Peruvian fishmeal at end-March hit a record USD2,200 per metric ton compared with between USD1,200 and USD1,600 in 2012. As a result China Fishery's H113 EBITDAR margin rose to 45% versus 40% for 2012. For the financial year ending 28 September 2013 (FY13), China Fishery's Peruvian fishmeal segment (excluding Copeinca) only saw a 5% yoy decline in EBITDA versus a 25% drop in revenue.

Leverage Remains High: Fitch expects China Fishery's leverage to exceed 3.0x in FY14 and FY15 following its Copeinca acquisition and the termination of the LSA prepayments. Pro-forma FY13 leverage including Copeinca full-year contribution would have been 4.1x. Following the LSA termination, China Fishery's FY14 leverage may be reduced to below 3.5x (net debt offset by the outstanding LSA repayment) if management persists with deleveraging. China Fishery's ability to generate positive free cash flow of about USD90m from FY15 can help the company reduce its leverage to below 3.0x by FY16.

Positive: The current rating is placed on Negative Outlook. As a result, Fitch's sensitivities do not anticipate developments with a material likelihood, individually or collectively, of leading to a rating upgrade. However, if all the above negative factors do not happen, then the Outlook may revert to Stable 

China Fishery completes comprehensive refinancing, secures $650m credit facility agreement

New capital structure and deployment unveiled.

China Fishery Group Limited (China Fishery) announced that it successfully completed a series of transactions that will significantly enhance the Group's capital structure and deployment.

" As we have been structuring our expanded Group for future growth and setting in place an improved capital structure, we have reviewed where we deploy our capital to best capture the opportunities before us. Transitioning to spot purchase of fish allows us to redeploy the significant capital tied up in pre-payments under the LSA's towards reduction in China Fishery's gearing," said Mr. Ng.

- See more at: http://sbr.com.sg/agribusiness/more-news/china-fishery-completes-comprehensive-refinancing-secures-650m-credit-facilit#sthash.SmagptKb.dpuf

The stage is set for Carlyle Group to announce the warrants .... this is just my wild guess. Haha thankfully the price did not gap up .... managed to collect some