Reassessment of preliminary purchase price allocation.
In an annual report statement on the Oslo Stock Exchange, Grieg Seafood writes that when it completed the acquisition of the Grieg Newfoundland Group last April it made an error.
“Upon preparation of the annual accounts for 2020, the company has conducted a reassessment of the preliminary PPA to reflect information obtained about facts and circumstances that existed as of the acquisition date,” said Grieg Seafood CEO Andreas Kvame.
“Due to a special warranty regarding the expected cost overrun on the RAS facility, the seller shall reimburse EUR 4 million to the purchaser,” added Kvame.
Last year, the EUR 62.5 million deal included includes a harvest potential of 30,000-45 000 tonnes a year. This includes exclusivity for salmon farming in Placentia Bay, which has a farmable area bigger than the Faroe Islands.
“The amount has been recognized in the adjusted PPA as indemnification assets and presented on a separate line item in the group’s statement of financial position. The preliminary amounts recognised in Q2 2020 have been adjusted retrospectively in accordance with IFRS 3,” the CEO said.
The board has recommended not to accrue for dividend based on the annual financial statements for 2020, due to the uncertainty caused by the current coronavirus situation.