Seafood giant Thai Union exits Red Lobster chain after losses

TU invested $575 million for a 25% stake in Red Lobster in 2016, adding another 13.7% of common equity interest in 2020.

COVID-19, industry headwinds, higher interest rates, and rising costs had resulted in “prolonged negative financial contributions” from Red Lobster to Thai Union and its shareholders, said Thiraphong Chansiri, CEO of the group.

TU posted a loss of 0.7 billion baht ($19 million) in the first nine months of 2023, attributed to Red Lobster’s performance.

The Thai seafood giant will pay a non-cash impairment charge for its investment in Red Lobster estimated at 18.5 billion baht ($530 million), to be included in the group’s fourth quarter 2023 earnings.

TU said its balance sheet remains strong despite the impairment, with a net debt-equity ratio of 0.84.

The company is one of the world’s biggest tuna canners, owning the Chicken of the Sea and John West brands.