Pedro Courard, the recently appointed chief executive of Atlantic Sapphire, is tasked with making the land-based fish farmer profitable, but a lot of money must be raised and spent for that to be achieved.

Photo: Atlantic Sapphire.

Atlantic Sapphire moves forward with multi-million dollar loan

Editorial team

Published 1 October 2024 - 13:09

The board of United States land-based salmon farmer Atlantic Sapphire has approved plans to raise between NOK 213.9 million (US $20.2m) and NOK 329m ($30m) with a convertible loan.

Dallas-based Condire Management LP, the management company for private investment company Condire Investors LLC, is the primary lender.

Norwegian salmon farmer Nordlaks, which as of December 31, 2023, was Atlantic Sapphire’s largest single shareholder with 12.32% of equity, is the other lender.

A convertible loan enables a lender to convert debt into equity (shares) in the borrowing company at a future date. Convertible loan notes are a convenient way to raise finance in the early stages of a company because issuing them does not require the company to be valued.

Although Atlantic Sapphire is now arguably beyond an early stage, a series of set-backs at its recirculating aquaculture system (RAS) facility at Homestead in Miami-Dade County has hammered its share price and value, despite its potential.

$25.6m commitment

Condire Management has committed to a subscription of up to NOK 271,334,967 ($25.6m) in the convertible loan, and not less than NOK 213,900,000 ($20.2m).

Nordlaks has committed to a subscription of up to NOK 57,487,658 ($5.4m) in the convertible loan, although its allocation may be reduced to NOK 0.

In August, Atlantic Sapphire said it could reach a production volume of 25,000 tonnes (head on gutted) per year in phases 1 and 2 of its Bluehouse development at Homestead but needed to raise and spend $94m (£60m) to do it.

Rights issue and loan

Arctic Securities AS and DNB Markets, part of DNB Bank ASA, had been engaged as facilitators in connection with an upcoming capital raise consisting of a fully guaranteed rights issue of up to $60 million (£46m) and the convertible loan of at least $20m, aimed at Condire Management LP and potentially Nordlaks Holding AS.

Atlantic Sapphire said certain existing shareholders, including Nordlaks Holding AS, Condire Management and Strawberry Capital AS, and other external investors had already subscribed to the NOK equivalent of $60m of the rights issue.