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SalMar’s £234m share issue may lead to quicker option for a Scottish offshore farm

Ocean Farm 1 and SalMar boss Gustav Witzøe, inset. SalMar intends to develop a construction pipeline for the rapid development of offshore farms.
Ocean Farm 1 and SalMar boss Gustav Witzøe, inset. SalMar intends to develop a construction pipeline for the rapid development of offshore farms.

The likelihood that Scotland will have an offshore salmon farm similar to Norway’s Ocean Farm 1 has been strengthened following a new share issue by Scottish Sea Farms co-owner SalMar that raised NOK 2.71 billion (£234 million) gross.

The Norwegian salmon farmer intends to use some of the money raised to build an organisation and a construction pipeline to allow the rapid development of large-scale offshore and semi-offshore sustainable salmon farming following its success with Ocean Farm 1.

Scottish Sea Farms has previously stated its intention to establish a similar offshore farm in Scottish waters and has the backing of both SalMar and co-owner Lerøy, although it has yet to identify a site. The option to choose an off-the-shelf design from SalMar could both cut costs and speed up implementation.

Sale oversubscribed

SalMar announced the private placement of 4,500,000 new shares at a subscription price of NOK 602 per share after close of business on the Oslo stock exchange yesterday and had concluded the sale within a few hours.

“The Private Placement received strong interest from high quality institutional investors in the Nordics and internationally, and was multiple times oversubscribed,” the company said in a market announcement.

It added that it had a strong track record of profitable growth during its 30-year history through operational excellence, organic growth and strategic mergers and acquisitions and sees several attractive growth and investment opportunities including offshore farming.

Construction pipeline

“SalMar has also taken a pole position in developing large-scale offshore farming, initially in Norway and eventually in other suitable locations,” stated the company.

“This is being pursued through the application for the establishment of the Smart Fish Farm pilot project for production in the open ocean where the company has received eight development licences and through building an organisation and a construction pipeline to allow the rapid development of large-scale offshore and semi-offshore sustainable salmon farming, based on SalMar’s sustainable, best in class operational performance. 

“The net proceeds from the Private Placement will be applied across these opportunities, subject to strict profitability and operational quality criteria.”

Kverva Industrier AS, SalMar’s largest shareholder and a company closely associated with the primary insiders Gustav M Witzøe and Kverva AS, as well as SalMar chief executive Gustav Witzøe, have been allotted 498,339 of the issued shares, and will after completion own 59.9 million shares in SalMar. In the first announcement, it was emphasised that Kverva Industrier AS would in all cases own more than 50% of SalMar’s shares after the issue.

LIN AS, a company in close relationship with SalMar and Scottish Sea Farms chair Leif Inge Nordhammer, has been allotted 25,065 new shares and will thus own 1.30 million shares.