This story is being updated.
Seafood Products Limited enters administration amid financial struggles.
Korean-backed UK distributor Seafood Products Limited has officially entered into administration.
The company’s managing director, Harald J. Skaar, expressed his sadness over this development in a recent communication. “This is not something we envisaged, but nevertheless a reality after almost 37 great years in the seafood business,” Skaar said. He attributed the company’s downfall to “substantial missing payments owed to us,” which severely strained their financial situation and operational capabilities.
The company, headquartered in Farnham, Surrey, will cease trading as of 22 March 2024.
Danny Allen of 360 Insolvency Limited, based in Rochester, Kent, has been appointed as the administrator by the High Court order dated 11 March 2024. He will act as an agent of the company without personal liability.
Skaar, who built Skaarfish into one of the largest salmon export companies in the world in the 1980s, has also held positions with Pan Fish, the company that became Mowi and Bakkafrost Scotland.
Missing payments
The events behind the missing payments that Skaar alludes to occurred last year, as detailed in a letter from a litigation company dated November 2023 and seen by SalmonBusiness.
In May 2023, the company was targeted in what is believed to be an organized scam, jeopardizing a customer payment of £314,458, according to the letter. Only a portion of this amount was covered by credit insurance, and efforts to recover the funds have been unsuccessful to date.
Compounding the company’s troubles were three shipments to a foreign-based customer, which encountered unresolved issues. These issues led to delays and potential non-payments, further straining the company’s liquidity. The sales associated with these shipments are linked to a supplier who also has overdue invoices with the company, amounting to £817,995. The supplier cited financial difficulties as the reason for the delayed payments.
The cumulative effect of these events, totalling £1,132,453, has severely strained the company’s liquidity. Following these developments, the company sought legal counsel to establish its position and explore potential resolutions in the interests of all stakeholders.
The company owes creditors more than £2.3 million, according to its most recent accounts, with a list of creditors seen by SalmonBusiness showing a single supplier alone is owed £696,956.
Korean investment
The company’s financial struggles were evident in their recent financial statements. For the year ending 31 March 2023, Seafood Products Limited reported a turnover of £33,110,828, an increase from £24,885,471 the previous year. Despite this, the company recorded a gross profit of only £840,904 against administrative expenses of £836,046, leaving a minimal operating profit of £4,858.
The directors’ report, filed 6 February, highlighted a “material uncertainty related to going concern,” focusing on challenges in collecting amounts due to the company and ongoing disputes over supply contracts. These disputes significantly impacted the company’s annual sales and financial results.
In 2019, Myungjin Holdings Corp a acquired a 50% stake in Seafood Products Limited for KRW 1.9 billion ($1.4 million). This transaction involved Myungjin Holdings purchasing 0.075 million shares from Ocean Supreme and 0.3 million shares from Harald Skaar.
Seoul-based Myungjin Holdings sells fish, seafood, and other products.
Ocean Supreme, headquarted in Aalesund supplies salmon and trout from the entire coast of Norway.
Following the acquisition, the shareholder structure of Seafood Products Limited consists of Myungjin Holdings holding a 50% stake, Harald Skaar retaining 40%, and Ocean Supreme owning the remaining 10%.
SalmonBusiness has contacted Seafood Products Limited for comment.
