Current weather

  • Scattered clouds
  • 54°
    Scattered clouds

State approves restructuring plan for struggling seafood processor

Posted: Wednesday, October 25, 2000

ANCHORAGE (AP) -- A state lending agency is giving the idled Alaska Seafood International plant in South Anchorage a $6.5 million reprieve.

The Alaska Industrial Development and Export Authority voted to make the loan Tuesday in exchange for becoming a part-owner of the company.

AIDEA will lend the seafood plant the cash and provide some rent concessions. For that, it will own 22.5 percent of the company.

The goal is to get Taiwanese investment partners to commit to the restructuring plan by Nov. 15, and to restart the plant after the first of the year.

Tuesday's vote was close, 3-to-2.

AIDEA board members who voted against the loan expressed doubts that the seafood company can survive. They also doubted that efforts to find a $5 million private investor with seafood or food-processing expertise will succeed.

Jeff Bush, representing the state Department of Community and Economic Development on the authority board, said he works closely with the seafood industry and could not justify voting for the plan.

''I do not see a potential investor out there willing to come forward,'' Bush said.

Larry Persily, on the board from the state Department of Revenue, suggested it might be smarter to find a new tenant than continue trying to salvage Alaska Seafood.

''I would prefer to see a new investor at the table and a new management staff before kicking in any more money,'' Persily said.

Robert Loescher, a board member and president of Sealaska Corp., a Juneau-based regional Native corporation, said he favored the deal because he was impressed that AIDEA Executive Director Bob Poe was able to go to Taipei last month and rekindle some interest.

The Taiwanese face losing millions in loans plus millions more in guarantees they had made to the state for building the factory.

Joining Loescher in voting for the deal were board chairman Wilson Hughes, general manager of Anchorage-based General Communication Inc., and Kurt Parkan, deputy commissioner of the state Department of Transportation and Public Facilities.

In arguing for the board to approve the deal Tuesday, Poe said doing otherwise likely would leave the fate of the seafood plant to Bankruptcy Court and lawyers.

The plant had been meeting its bills by selling inventory and had a string of creditors, including Anchorage vendors, Poe said. Seafood industry players might be reticent about investing in the company because they're waiting for a bargain should it fail, he said.

If it all comes together, then the restructuring package is designed to keep Alaska Seafood International going for two years. It can go forward even if no private investor is landed, Poe said.

Alaska Seafood began limited operations last year, but the company shut down and laid off its workers this summer after financing problems arose with its Taiwanese backers.

The venture has been promoted as a way to create more than 400 jobs and revolutionize Alaska seafood processing.

The 184,000-thousand-square-foot factory building was built in the late 1990s with $50 million in state money.

The plant is designed to turn millions of pounds of salmon, pollock, halibut and other fish into breaded and marinated fish portions and heat-and-eat meals. The hope is to sell primarily to major buyers who would market the goods under private labels.

Established seafood processors, who do little processing of raw Alaska seafood before shipping it out of state, have complained that the state is subsidizing a potential competitor. They also have said the plant doesn't make sense for Alaska, which is far from raw manufacturing supplies and markets.

But Alaska Seafood executives contend they haven't had a chance to make their business work because political upheaval in Taiwan cut off its start-up money.



CONTACT US

  • 150 Trading Bay Rd, Kenai, AK 99611
  • Switchboard: 907-283-7551
  • Circulation and Delivery: 907-283-3584
  • Newsroom Fax: 907-283-3299
  • Business Fax: 907-283-3299
  • Accounts Receivable: 907-335-1257
  • View the Staff Directory
  • or Send feedback

ADVERTISING

SUBSCRIBER SERVICES

SOCIAL NETWORKING

MORRIS ALASKA NEWS