The parties to the Memorandums of Understand (MOUs) for the sale of Fishery Products International (FPI) Limited have advised the Provincial Government that they have achieved binding agreements. As such, government will now review these agreements and ensure that all the terms and conditions that were set out in government�s MOUs with these parties have been met. Government will negotiate binding agreements with Ocean Choice International Incorporated (OCI) and High Liner Inc. further to the MOUs negotiated with these companies in May.

"As a government we must now do our due diligence to ensure that the agreements meet the terms and conditions we require," said the Honourable Tom Rideout, Minister of Fisheries and Aquaculture. "A review of the documents will now be carried out by government�s legal counsel. We will also proceed to ensure the commitments from OCI and High Liner that were made to the Province in May are incorporated into binding agreements with government."

The sale of FPI must still go through regulatory processes such as approval by the shareholders of the publicly-traded companies and review by the various bodies that regulate competition.

"The Provincial Government is not the only regulatory body that must approve this sale," said the minister. "The publicly-traded companies involved must still go through their own regulatory process. Once the entire process is complete and we are satisfied, government will be in a position to give our final approval to the sale and proclaim the legislation we passed during the spring session of the House of Assembly. We are very optimistic that the sale will be concluded by the end of October."

A nine-year condition of licence has been achieved, requiring OCI to land and process certain offshore groundfish quotas in this province. Once all the regulatory approvals are in place and before government proclaims the new legislation in relation to FPI, the parties to the agreement will ask the Federal Government to transfer the groundfish quotas as per the MOU that was reached with the Federal Government. FPI�s groundfish quotas will then be transferred to a company which will be owned 49 per cent by the Provincial Government and 51 per cent by OCI.

It was announced on May 28 that the Provincial Government has secured $3 million from FPI which will be put toward employee wages in a new collective agreement. "We are pleased to report that government will now be receiving the $3 million as per the terms of the agreement. It was agreed that this money would be transferred at the time of the sale of The Seafood Company in the United Kingdom. This sale has now taken place and we are in the process of transferring these funds to the parties for distribution to the FPI plant workers and trawler crews."

As part of the MOUs that were completed in May, the Provincial Government has secured undertakings from both OCI and High Liner that will guarantee recent levels of employment over the next five years at the fish processing facilities that are currently being run by FPI. OCI and High Liner will invest $8 million and $3 million, respectively, on the operations of the FPI plants.

"These agreements will provide a new level of stability for rural communities such as Burin, Marystown, Bonavista, Triton, Port Union, Port au Choix and Dildo," Minister Rideout said.

Government has also achieved an enhanced and stabilized operating plan for Burin. The Burin plant will be kept open for a minimum of five years with a minimum annual output of 17.5 million pounds in the first full year of operation. Under FPI, Burin would likely have seen significantly reduced activity and employment for 2007 and beyond.

"FPI has been a company in crisis for the last number of years," said Minister Rideout. "Bringing stability to the communities in which FPI has been operating has been a priority for our government. As the deal proceeds to the final approval process, we are taking important steps toward achieving that stability. This process will continue to be a priority for government until it is completed. However, we will ensure that the terms and conditions laid out by government will be addressed as we move forward."

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Media contact:
Lori Lee Oates
Director of Communications
Department of Fisheries and Aquaculture
709-729-3733, 690-8403
oatesll@gov.nl.ca

2007 08 24                                        11:05 a.m.