Scottish Salmon Co. sets up joint venture to invest in value-added processing

SSI will subsequently invest into companies engaged in the value-added processing of seafood in the UK. SSI is to be financed 33 per cent by SSC and 67 per cent by Northern Link Ltd.

SSC also announced that SSI is in the final stages of negotiations to make an investment into Associated Seafoods Ltd (ASL). ASL is a Scotland-based holding company set up by an experienced management team, including Bill Hazeldean and Dr Stewart McLelland who are currently the CEO and COO of SSC, with an objective to invest into value-added processing of seafood. ASL will concentrate on value-added processing of salmon (smoking, ready-to-cook, ready-to-eat, etc.) and adding other species to complement its value-added offering.

SSI`s initial investment in ASL would be £0.6M, giving SSI an initial ownership of 50 per cent of the ordinary shares in ASL. As new acquisitions are made by ASL, SSI has committed to additionally invest up to £12.9m into ASL over a 5 year period (up to £4.3m to be contributed by SSC) and the original shareholders of ASL have committed to invest up to an additional £0.5M.

The joint venture will enable SSC to accelerate its growth in the seafood value-added processing in the UK and to advance one of SSC`s key strategic goals of expanding its "farm to customer" value chain. NL`s role in SSI will be as financing partner, taking on the majority of the investment risk while the business is developing. Once ASL completes the creation of a viable and successful seafood value-added processing business, SSC will have the opportunity to fully integrate the business into its own operations