3i-Backed British Seafood Goes Into Administration

LONDON (Reuters) – British Seafood, the fish importer and distributor part-owned by 3i Group (III.L), has gone into administration, wiping out gains made by the private equity firm’s sale of healthcare company Ambea.

Tough conditions in financial markets have caused some banks to withdraw trade credit, choking the supply of working capital necessary for businesses like British Seafood.

“It was a growing business and a good business,” said a spokesperson for 3i, which bought a 28.5 percent stake in British Seafood in December 2007.

The company relied on trade credit to pay suppliers in Asia before being paid by its customers several months later.

The collapse of the business wipes out 3i’s investment, valued at 81 million pounds ($124.2 million) at the end of September.

It also wipes out the net gain from the firm’s sale earlier this week of Scandinavian care homes business Ambea to rival private equity firm Triton, which analysts expect to be about 70 million pounds. [ID:nLDE61M172]

Shares in 3i were down 1.8 percent at 264.5 pence at 1115 GMT, but Evolution Securities called the failure a “one off/accident rather than symptomatic of a wider malaise”.

Deloitte has been appointed as administrator to a number of companies in the British Seafood Group. Others, including Five Star Fish, a Grimsby-based fish processing business, is unaffected by the administration.

“We have only just been appointed administrators to the companies and as such our initial efforts will be focussed on reviewing the businesses and protecting their assets,” said Matt Smith, joint administrator.

“We will be exploring the options available to them, including the possibility of a sale as a going concern,” Smith added.

British Seafood grew earnings before interest, tax, depreciation and amortisation 18.7 percent to 26.7 million pounds in 2008, with revenue climbing 27 percent to 324 million pounds. (Reporting by Simon Meads; Editing by Jon Loades-Carter) ($1=.6521 Pound)