April 27, 2021
Salmon Evolution stops share offering after share price declines
Norway-based Salmon Evolution ASA has canceled its latest share offering following a drop of its share price below the offer price.
Earlier this year, Salmon Evolution, which is currently building its first hybrid flow-through system farm at Indre Harøy on the Norwegian west coast, successfully completed a kr500 million (US$59.3 million) private placement at kr6.00 (US$0.71) per share. It subsequently planned a further offering of up to 8,333,333 new shares in the company, also at kr6.00 per share, which would have raised another kr50 million (US$5.9 million).
However, in a stock exchange notice, it advised that following its board of directors' conditional resolution to carry out a subsequent offering, its share price "for an extended period and with substantial volume" traded below the subscription price.
The share prices of numerous land-based salmon farming startups have struggled since last week, when Atlantic Sapphire, the operator of a recirculating aquaculture system (RAS) salmon farm in Miami, Florida, the United States, reported underwhelming results in its 2020 annual financial report and its Q1 2021.
"Existing shareholders wanting to avoid or reduce the dilutive effect of the private placement have had the opportunity to purchase shares in the open market at prices below the subscription price in the private placement and the contemplated subsequent offering," the notice stated. "The company has therefore resolved to cancel the subsequent offering."
Earlier this month, Salmon Evolution entered into a committed term sheet with banks Nordea and Sparebanken Vest for a senior secured debt financing package of up to kr625 million (US$74.1 million) relating to the phase-one build-out of its first production facility at Indre Harøy.
The financing package comprises a kr525 million (US$62.2 million) senior secured credit facility to be used to finance the first phase of construction of the Indre Harøy farm, and a kr100 million (US$11.9 million) senior secured overdraft facility which will be used for working capital purposes, the financing of biomass and receivables.
On completion, the Indre Harøy farm is expected to have an annual production capacity of approximately 31,500 tonnes head-on-gutted weight salmon.