Land-based fish farmer raising an extra £46m
Private placement will meet various costs and cover water disinfection contingency
Land-based fish farmer Andfjord Salmon has announced a contemplated private placement of new shares worth between NOK 600 million and NOK 650m (£42.5m-£46m).
Part of the need is new Norwegian regulations, which in the worst case for Andfjord will require the intake water for its flow-through system to be disinfected.
The funds will also be used for further development of the company’s Phase 2 development at Kvalnes on the island of Andøya; optimisation of fish logistics for improved production capacity; and general corporate purposes.
Jerónimo Martins
The company's largest shareholder, Portuguese retailer Jerónimo Martins Agro-Alimentar SA, which owns a 28.04% stake, has pre-committed to subscribe for and will be allocated shares for a minimum of NOK 225m. It will own at least 30% of the company after the placement.
High Liner Foods, a leading North American seafood producer and supplier which has a 5.38% stake in Andfjord, has pre-committed to subscribe for shares for a NOK amount equivalent to US $10 million (approximately NOK 111m).
Jan Heggelund has pre-committed to subscribe for offer shares for NOK 25m.
The so-called “bookbuilding period” started today at 16.40 (CET) and ends tomorrow at 08.00 (CET). The issue is expected to be completed around March 13, 2025.
Phase 1 on track
The company also writes that the development of phase 1 and common operational infrastructure for the next 12 pools at Kvalnes is expected to be completed by Q2 2025, in line with the previously communicated schedule and budget.
Recent design improvements have enabled a 20% increase in production capacity, and the company has received a term sheet signed by the banks for a NOK 400m construction loan to support the next expansion phase.
Production capacity in the current development phase (Phase 1) is expanded from 8,000 tonnes to up to 11,000 tonnes (HOG + post-smolt).
The total production volume under Andfjord Salmon’s existing concession at Kvalnes is expected to increase from 19,000 tonnes to 23,700 tonnes.
The company also says that the mixed capital expenditure (CAPEX) per kilo at Kvalnes is estimated to be reduced from NOK 114/kg to NOK 105/kg.
Leaseback of port
In addition, an agreement has been signed for the sale and leaseback of Kvalnes port infrastructure for approximately NOK 400m. The transaction is expected to have a positive cash effect of over NOK 200m, with the other NOK 200m of the sale proceeds used to repay existing bank loans related to the port area. The transaction is subject to final agreements and due diligence, with the expected signing of the share purchase agreement in March 2025. Upon completion, the port will be leased back to the company on an 80-year contract, ensuring continued operational control.
The company says it is now planning an immediate start of Phase 2a construction, which will enable it to benefit from synergies in the construction process, including through the continuation of personnel and utilisation of equipment already on site, to optimise resource use and accelerate completion time.
“Our new fish logistics system increases the flexibility to move fish between pools, which provides a significant increase in production while maintaining Andfjord Salmon’s industry-leading farming conditions,” said chief executive Martin Rasmussen.