Clearwater postpones buyback as Icelandic bank collapses
Seafood producer says company will continue to operate as usual
A bank failure overseas has forced Nova Scotia seafood giant Clearwater Fine Foods to delay a buyback of publicly traded units in its income fund.
The Iceland government announced Tuesday night that Glitnir Bank went into receivership, the latest victim in the global economic crisis.
The bank was providing 10 per cent of the money the seafood company needed to buy back units in the Clearwater Seafoods Income Fund. The deal was to close Oct. 17, with shareholders getting $4.50 a unit.
The fund's unit price fell $1.58, or 37 per cent, to close at $2.72 Wednesday on the Toronto Stock Exchange.
Clearwater CEO Colin MacDonald said the deal is now postponed until Oct. 31, and there's no guarantee it will proceed as planned.
"This is obviously a bit of a surprise," he said of the bank's failure.
"I think things have to sort themselves out. There's a lot of changes taking place, a lot of gyrations going on underneath the covers that we're not aware of."
MacDonald said the company will continue to operate as usual and employees don't have to worry about their jobs.
At this point, he said, the collapse of Glitnir Bank only affects the deal to buy back units.