Japanese seafood company Maruha Nichiro has reached an agreement to sell its US subsidiary Peter Pan Seafoods (PPSF) to equity investment firm McKinley Capital Management and specialist investor Rodger May.

Maruha Nichiro said that the asset will be divested at a loss of JPY3bn ($28m).

PPSF has been processing and selling fishery products, including sockeye salmon and pink salmon, from its processing factory in Alaska, US.

PPSF’s Alaskan salmon business is said to have recently registered losses due to an increase in raw fish prices and poor catch of fish, as well as a dro in production. All these factors triggered the deal, noted the Japanese seafood company.

Under the agreement, Maruha Nichiro will divest PPSF-owned factories, fixed assets and operations. The deal is expected to complete on 31 December.

Maruha Nichiro anticipates that financial performance will not improve as the competition for raw fish materials is expected to further intensify in the future.

Going forward, McKinley Capital Management and Rodger May intend to continue the PPSF business and conclude a purchase negotiation agreement for the products and continue to handle PPSF products.

Maruha Nichiro intends to use the proceeds from the divestiture to improve management efficiency in the future.

Last April, Maruha Nichiro expanded its footprint by acquiring a 33.3% stake in Spanish company Inlet Seafish for an undisclosed sum.

Headquartered in Parc Sagunt, Valencia, Inlet Seafish has been active in the Spanish frozen seafood market for more than two decades.