October 16, 2023

 

Norway-based Gigante Salmon raises another US$18.2 million through private placement

 

Gigante Salmon, which is currently building a land-based salmon aquaculture facility in Lille Indre Rosøya, Norway, has successfully raised another kr200 million (US$18.2 million) through a private placement.

 

The placement is intended to help pay for an expected cost increase of kr200 million for its flow-through salmon aquaculture system. The company announced the cost increase in September and subsequently announced in October that it secured kr100 million (US$9.1 million) in financing through a long-term leasing arrangement with SpareBank 1 Finans Nord-Norge.

 

The cost increases stem from general price increases for construction, including electric power and from changes to the facility made to "secure fish welfare and accommodate sustainable production," the company said.

 

In an investor update on October 11, Gigante Salmon clarified that of the kr200 million cost increase, kr70 million (US$6.4 million) is coming from cost increases and kr130 million (US$11.8 million) is coming from design improvements to the facility.

 

The design improvements include filling out the east shore of the island the facility is located on to create an area for future expansion or additional water treatment/processing equipment, automation equipment, increased redundancy in the water supply system and for a power capacity increase from five megawatts to 6.5 megawatts with added redundancy.

 

The initial round of funding was secured through an allocation of 27,777,777 shares at a subscription price of kr7.20 (US$0.65) per share. SpareBank 1 Markets and SpareBank 1 Nord-Norge Kapitalmarked acted as the joint bookrunners on the private placement, the company said in a release on the Oslo Børs.

 

Gigante Havbruk AS, the parent company of Gigante Salmon, was granted half of the shares.

 

Gigante Salmon said the funding will be used to fund the company's continued investment and working capital needs "for the construction and operation of the land-based salmon farming site on Lille Indre Rosøy in Rødøy municipality as well as for general corporate purposes."

 

In its investor update, the company said that it is on track for its first harvest in the fourth quarter 2024, and aims to have the grow-out basin completed in Q4 2023.

 

According to its projections, Gigante Salmon expects to harvest 5,300 metric tonnes of head-on gutted salmon in its first harvest. 

- SeafoodSource