Alaska Seafood International abruptly closed its doors and put 43 employees out of work on Tuesday after the company announced its owners no longer wanted to operate the struggling plant.
Alaska Seafood International, which operated since 1999 but never fulfilled the promise of providing hundreds of jobs and a value-added market for Alaska salmon, hopes to liquidate its assets and avoid bankruptcy.
A majority of the owners decided they could no longer continue to put money into the business, which operates as The Great Alaskan Seafood Co., said Doug Bell, president of ASI.
"This business was just built too large, to the point it couldn't build on success and get the momentum it needed," said Doug Bell, ASI president.
Grandway Investments, which is majority interest owner; Sunrise Capital Partners and the Alaska Industrial Development and Export Authority were involved in the decision, the Anchorage-based company said.
The state had partnered with ASI in the late 1990s in an attempt to create hundreds of jobs in a sophisticated seafood marketing industry in Alaska.
A 202,000-square-foot factory was built using $50 million in state money, and the plant was eventually supposed to employ 450 people.
AIDEA, which owns 7 percent of the company as part of a financing deal, had deferred the $360,000 monthly rent since ASI began operating in 1999. But in May, the state told the company that it would again expect rent as well as about $100,000 a month in other costs that the state had been paying.
Despite improving sales in recent months, there was insufficient cash to continue daily operations, but employees will be compensated for their hours and vacation time, the company said.
Bell estimated the company has about $20 million in debt as well as money owed to AIDEA.
Ron Miller, executive director of AIDEA, said it is unclear how much ASI owes his agency. The other primary creditor is Bank SinoPac, headquartered in Taiwan, the company said.
AIDEA made a decision to support dissolving the company on Monday after being approached by some of the other shareholders last week, Miller said.
Now, the decision has to be made whether to sell or lease the factory and 36 acres of land in south Anchorage, Miller said. The agency has been approached about doing both, he said.
"We will take our time to market the facility so we can maximize the return to Alaska," Miller said.
As the company liquidates its possessions, ASI will return legal possession of the building and its expenses to AIDEA, the company said. Those costs are just under $100,000 per month, said Jim McMillan, deputy director of credit for AIDEA.
From the start, ASI had money problems with its Taiwanese financial backers, management upheaval, weak sales, layoffs and other troubles.
When it closed, the company occupied only a small portion of its large factory.
McMillan defended the state's decision to become involved with the company, saying feasibility studies showed there was a reasonable chance of success.
He said ASI offered an opportunity to grow the manufacturing industry in the state and provide a value-added market for Alaska seafood.
The concept was good, the execution was flawed, McMillan said.