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MarineMax (NYSE:HZO) disclosed in an SEC filing late on Wednesday that the assets of one of its subsidiaries in Mexico had assets seized by the government.
The company said that on April 11, without warning or notice, the General Directorate of Ports of Mexico seized the assets of Cabo Marina, S. de R.L. de C.V , which is a subsidiary of IGY Marinas, a wholly owned subsidiary of MarineMax. The port authorities then initiated a sanctioning procedure. On the same day, the Administration of the National Port System for Los Cabos rejected Cabo Marina’s application for a new concession for the Port of Cabo San Lucas. MarineMax (HZO) said the General Directorate of Ports subsequently forced Cabo Marina to cease operations and the ASIPONA took control of the Port of Cabo San Lucas.
Cabo Marina has operated the marina in Cabo San Lucas for more than 20 years and was actively processing a new concession agreement in good faith when ASIPONA and the Mexican Navy took possession of the port. MarineMax (HZO) said that it believes that the takeover of Cabo Marina’s facilities is illegal and that the alleged violations underlying the sanction proceedings against Cabo Marina are illegitimate. In response, MarineMax (HZO) has engaged Mexican and U.S. Government officials to resolve the dispute. The company may also resort to legal action to enforce its rights if diplomatic efforts fail.
In terms of the financial impact, the Cabo Marina was associated with less than 4% of total assets and less than 1% of total revenues in the consolidated financial statements of MarineMax (HZO) for the last fiscal year.
Shares of MarineMax (HZO) were inactive during the premarket session on Thursday. The boat dealer stock is down about 30% on a year-to-date basis.