Part of Red Lobster’s Parent Company Group is “Pursuing Exit”

Courtesy Google Maps

Thai Union Group PCL has an announced its intention to pursue an exit of its investment in Red Lobster. has two Montgomery County locations- Gaithersburg and Silver Spring. There is no current plan to close either restaurant.

Thai Union has been a Red Lobster shareholder since 2016 and in 2020 joined Red Lobster management and a new company called Seafood Alliance as owners of the company. Though technically a minority owner as part of a group, Thai Union is widely regarded as the parent company of Red Lobster.

In a press release last month, Thai Group stated 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.” In an earnings call on Monday, Thai Union Group’s CEO Thiraphong Chansiri provided additional details about the sale saying that the company is preparing to launch a bidding process which could take up to four months, according to Restaurant Business. “We’re not expecting to get anything much from the sale,” Chansiri told investors during the call Monday, according to a transcript from AlphaSense.

The full press release from January can be seen below: “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.

For more information, you can find the analyst update on the Red Lobster investment in this link.”

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