Phase 1 of Atlantic Sapphire's Bluehouse on the right, and Phase 2 under construction on the left.

Existing investors back Atlantic Sapphire with another $65 million

Nordlaks and Texas investment manager lead fundraising for struggling land-based salmon farmer

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Norwegian salmon farmer Nordlaks has doubled its investment in Atlantic Sapphire as part of the US operation’s latest fundraising exercise.

Atlantic Sapphire (AS), which grows Atlantic salmon on land at its Bluehouse facility in Miami-Dade County, Florida, yesterday announced a successful private placement of new shares to raise gross proceeds of the NOK equivalent of approximately $65 million.

It said the net proceeds from the private placement will be used to reach an estimated EBITDA break-even for Phase 1 of its Blouehouse during the first half of next year, with a cash buffer.

AS has been having problems keeping the water for its fish cold. It said it will deploy rental chillers estimated to bring water temperatures back to budgeted levels. The company may upon satisfactory system performance seek to eliminate chiller rental costs by utilising excess buffer towards finalising investment in the new chiller plant for phases 1 and 2 of its facility.

Two tranches

Nordlaks, which was an existing shareholder, invested $10m in a private placement in AS in March, and is spending about the same in the new placement.

Other existing shareholders have also committed to take part in the placement.

Texas-based investment management company Condire Investors, LLC will buy shares for the NOK equivalent of minimum $12.5m, and Strawberry Equities AS for its pro-rata share, which is 8.4% of the new shares.

Blue Future Holding AS, part of the German EW Group that owns salmon ova supplier AquaGen and tilapia breeding specialist GenoMar, will buy its pro-rata share of 3.84% of the placement.

The new shares are being issued in two tranches: one tranche of 55 million which the AS board already has permission to issue, and a second tranche of 446,428,571 shares which will be issued if approved at an extraordinary general meeting to held early next month. Nordlaks and Strawberry Equities will both receive their shares from the first tranche.

The shares are priced at NOK 1.40, an indication of how far the company’s fortunes have fallen in the last few months. In March, shares for the last private placement were priced at NOK 5.