In the wake of rumors about Bumble Bee Foods potentially filing for bankruptcy, and that that filing could come this week, the company appears to be in talks with Fong Chun Formosa (FCF) Fishery Company regarding a possible buy-out.
The story, reported by Bloomberg, indicates that FCF would be a “stalking-horse bidder” in the bankruptcy reorganization. Stalking-horse bidders set a low-end bidding bar, which any other companies interested in buying Bumble Bee would then have to either match or exceed.
According to Bloomberg, the FCF has discussed a bid of USD 925 million (EUR 836 million) for the company, made up of USD 275 million (EUR 248 million) in equity and USD 650 million (EUR 587 million) in debt.
Taiwan-based FCF Fishery is one of the largest tuna suppliers in the Western Pacific, and one of the largest marine products trading companies in the world. It handles more than 520,000 metric tons of tuna annually, with over 600 fishing and fishing-related vessels.
The company recently came under fire from Greenpeace over poor labor standards, in a report the NGO titled “Misery at Sea.” Taiwan had also been the subject of a European Commission yellow card, issued in October 2015, related to the country’s failings in fighting against illegal, unreported, and unregulated (IUU) fishing activities. That yellow card was rescinded in June.
Bumble Bee’s financial struggles were first revealed through the reduction of a fine it received for the company’s role in a widespread price-fixing scheme, which the company plead guilty to in 2017.
The U.S. Department of Justice agreed to lower the fine to USD 25 million (EUR 22.6 million) because assessing the full amount of the fine could have led to the company’s insolvency. If the company is sold, however, that fine will rise to USD 81.5 million (EUR 73.6 million), due to an agreement Bumble Bee’s owner – Lion Capital – signed with the U.S. DOJ.
The company also still faces a lawsuit stemming from the price-fixing scheme, and a separate class-action lawsuit over its “dolphin-safe” claims.
Photo courtesy of rblfmr/Shutterstock
