Nordic Aqua Partners raises extra funds after 'off flavour' problems in RAS

An extraordinary general meeting of stakeholders in land-based salmon farmer Nordic Aqua Partners has today approved the issue of 4,666,666 new shares to raise money through a private placement, the company said in a stock market announcement.

The shares, with a par value of NOK 1.00, are being bought for NOK 75 each and will raise gross proceeds of NOK 350 million (€29.7m / £24.7m) if all shares are subscribed.

Nordic Aqua Partners, which operates a recirculating aquaculture system (RAS) facility in Ningbo, China, announced in August that it planned to raise an extra NOK 250 million (€21.3m / £18m) following problems in July with geosmin, a naturally occurring compound that can give fish an “off” taste.

The money will cover Oslo-headquartered Nordic Aqua’s capital expenditure requirements and compensate for a reduced harvest in the second half of this year due to the time that work to solve the geosmin problem will take.

Backed by shareholders

The company said all primary insiders that are large shareholders (Kontrari AS, AKVA group AS, Aino AS and Maringto AS) were supportive and had all indicated that they would contribute to funding needs.

Nordic Aqua Partners, which had to halt harvesting in the third quarter because of the geosmin issue, is spending around €2m on a suite of measures to resolve the problem.

The company began harvesting fish commercially in April and had been ramping up production week by week through to August. By the end of June, it had harvested 523 tonnes of fish with an average harvested weight of 4.54 kilos (head on gutted) and a low mortality rate of 1.9% from 150 grams to first harvest.

Reduced H2 harvest

Due to the initiatives taken to combat geosmin, the harvest plan for the second half of the year had to be adjusted to a significantly lower level. The company didn't expect to have any harvest in Q3 2024 and 400 to 600 tonnes in Q4 2024. The harvest for next year is estimated to be in the range of 4,500 to 5,000 tonnes.

Stage 1 of Nordic Aqua’s facility has an annual production capacity of around 4,000 tonnes. Construction for an additional 4,000-tonne Stage 2 capacity was initiated in the third quarter 2023, and the preparations for Stage 3 expansion to 20,000 tonnes are under way.