![Thai Union Group announces intention to pursue exit of minority investment in Red Lobster](/img/files/20240117/iq80129619493b015a1b2984ed8cc84df3.jpg)
Group to record one-time estimated THB 18.5 billion non-cash impairment charge in connection with investment exit
After impairment, balance sheet remains strong with a Net Debt/Equity Ratio of 0.84
Decision aligns with broader updated strategic plan to focus on core business
Thai Union Group PCL (the "Group") today announced its intention to pursue an exit of its minority investment in Red Lobster.
Since 2016, Thai Union has been a strategic partner and minority investor in Red Lobster. As previously disclosed in 2023, Thai Union and Red Lobster initiated a review of Red Lobster to identify areas for operational and financial improvement.
"The combination of Covid-19 pandemic, sustained industry headwinds, higher interest rates and rising material and labor costs have impacted Red Lobster, resulting in prolonged negative financial contributions to Thai Union and its shareholders," said Thiraphong Chansiri, Thai Union Group's CEO. "After detailed analysis, we have determined that Red Lobster's ongoing financial requirements no longer align with our capital allocation priorities and therefore are pursuing an exit of our minority investment."
The Group recorded a share of loss of THB 0.7 billion (USD 19 million) in the first nine months of 2023 from Red Lobster. While Thai Union continues to explore available options for its exit, the Group will record a one-time estimated THB 18.5 billion (USD 530 million) non-cash impairment charge for its whole investment in Red Lobster, which will be included in the Group's fourth quarter 2023 earnings.
After impairment, Thai Union's business and financial position remain strong with a low net debt/equity ratio of 0.84 To prove Thai Union's strong financial position, the Board has approved a share repurchase for financial management purposes not exceeding THB 3.6 billion or 200 million shares. The Group continues to deliver improvements in profitability and gross profit margin across all core business categories. Thai Union is in the process of finalizing its Corporate Strategy 2030, which will focus on its core business, centered around Ambient Seafood, Frozen, and PetCare. Through this, Thai Union's management will advance ongoing strategies that strengthen its overall profitability and deliver long-term enhanced value for the Group's shareholders.
More information will be provided through our website www.thaiunion.com