Gigante Salmon lays out plans to fill big funding shortfall

Gigante Salmon will use a bank loan and a private placement of shares to raise the extra NOK 350 million (£25.8m) it needs to complete its 16,000-tonnes-per-year land-based salmon farm in Norway, it said today.

The company, which fired its former chief executive Helge Albertsen in March because of the huge cost overruns, has arranged a NOK 120m loan from SpareBank 1 Nord-Norge, 50% of which is guaranteed by state organisation Export Finance Norway.

It also plans to issue shares worth NOK 130m which will be supported by majority owner Gigante Havbruk AS. In October, it raised NOK 100m more than required in a share issue, and this will also be used to meet the extra construction costs.

External construction management were hired during the first quarter of 2024.

Raceways

Gigante Salmon intends to grow salmon in raceways in three production basins excavated into the rock on the islands of Lille Indre Rosøy. Basin 3 is completed and is being used to grow smolts to 1kg before they are transferred to basins 2 and 1 to reach harvest size.

Basin 2’s deep foundations and wall and floor castings have been completed according to schedule, wrote Gigante Salmon in its Q1 2024 report.

Both of the side walls and the floor have been cast and prepared for surface treatment which was due to will start in early Q2.

Two batches of 640,000 smolts were stocked in Basin 3 at the end of January, but only 160,000 survived. The surviving fish are doing well and had an average weight of 150 grams last week.

Die-off

“The die-off was mainly due to problems with the smoltification process in combination with underlying diseases, transport, the timing of the release and temperature,” wrote Gigante Salmon.

“Regardless of the outcome of the smolt release, operating the facility has provided us with valuable experience, and we have become aware of a number of issues. All of the issues can be addressed, but they require attention in both the short and long term. The issues mainly relate to sludge, dead fish and cleaning. One immediate solution was to purchase a sludge and dead fish ROV, and we are working on a permanent solution that will be both simple, manageable and less labour-intensive. Overall, basin 3 and the three operational raceways function as expected. The need to adjust and refine the concept was expected and is manageable.”

Extra feeding

Gigante said that in addition to devoting time to addressing sludge, dead fish and cleaning issues, its focus has been on its feeding systems.

“It has been necessary to supplement the daily ration provided by the feeding system with large amounts of feed by hand and machine from the service fleet. In connection with this we purchased manually operated feeding machines that have been effective.

“Otherwise, everything is slowly but surely falling into place, and we believe the facility will live up to its potential. We are thankful to our staff for their significant contribution towards establishing operations.

“Being able to participate in an operation of this sort at the early stages is extremely rewarding for all those involved, and it is hugely motivational when working towards a common goal.”