Salmon Evolution ASA: Contemplated Private Placement

Stock exchange notice

Salmon Evolution ASA (“Salmon Evolution” or the “Company“) has engaged ABG Sundal Collier ASA, DNB Markets (a part of DNB Bank ASA), Nordea Bank Abp (filial i Norge) and Pareto Securities AS as joint bookrunners (together the “Managers“) to advise on and effect a contemplated private placement (the “Private Placement“) of new ordinary shares in the Company (the “Offer Shares“), raising gross proceeds up approximately NOK 250 – 300 million (“Offer Size”). The price per Offer Share in the Private Placement (“Offer Price”) will be set by the Company’s board of directors (the “Board“) on the basis of an accelerated book-building process conducted by the Managers.

Certain existing shareholders (incl. Ronja Capital II AS, Farvatn Private Equity AS, Rofisk AS, Stette Invest AS and Kjølås Stansekniver AS) have collectively pre-committed to apply for, and will be allocated, Offer Shares for approx. NOK 37 million at the Offer Price.

Based on limited wallcrossing exercise prior to launch, the Managers have received indications of interest to subscribe for Offer Shares so that the Private Placement is covered on indications of interest at the start of the application period.

The net proceeds from the Private Placement will be used to (i) to partly fund the second phase of the salmon farming facility at Indre Harøy; (ii) to expand the capacity at the smolt facility Kraft Laks AS; and (iii) for general corporate purposes. See below for a description of the potentially reduced proceeds to the Company if the EGM does not approve Tranche 2 (as defined below).

The application period in the Private Placement will commence today, 5 April 2022 at 16:30 CEST and close on 6 April 2022 at 08:00 CEST. The Managers and the Company may, however, at any time resolve to close or extend the application period on short or without notice. If the application period is shortened or extended, any other dates referred to herein may be amended accordingly.

The Private Placement will be directed towards selected Norwegian and international investors (a) outside the United States, subject to applicable exemptions from any prospectus and registration requirements and in reliance on Regulation S. under the U.S, Securities Act, and (b) to investors in the United States who are QIBs as defined in Rule 144A under the U.S. Securities Act, and to major U.S. institutional investors under SEC Rule 15a-6 under the United States Exchange Act of 1934, in each case subject to an exemption being available from offer prospectus requirements and any other filing or registration requirements in the applicable jurisdictions and subject to other selling restrictions. The minimum application and allocation amount has been set to the NOK equivalent of EUR 100,000 per investor. The Company may, however, at its sole discretion, allocate an amount below EUR 100,000 to the extent applicable exemptions from the prospectus requirement pursuant to the Norwegian Securities Trading Act and ancillary regulations are available. Further selling restrictions and transaction terms will apply.

Allocation of Offer Shares will be determined at the end of the application period by the Board in consultation with the Managers, at its sole discretion, based on allocation criteria such as (but not limited to) existing ownership in the Company, pre-commitments, timeliness of the application, price leadership, relative order size, sector knowledge, investment history, perceived investor quality and investment horizon.

Settlement and conditions

The Offer Shares will be allocated in two tranches as follows: one tranche with up to 22,574,374 Offer Shares (“Tranche 1”) and a second tranche with a number of Offer Shares that results in a total transaction (i.e. both tranches) equal to the Offer Size (“Tranche 2”). Both Tranche 1 and Tranche 2 will be settled with existing and unencumbered shares in the Company, that are already listed on Oslo Børs, pursuant to a share lending agreement (the “Share Loan”) between the Company, the Managers, Stette Invest AS, Rofisk AS and Ronja Capital II AS. The Offer Shares allocated to applicants in both Tranche 1 and Tranche 2 will thus be tradable from notification of allocation. Applicants will receive a pro-rata portion of Offer Shares in Tranche 1 and Tranche 2 based on their overall allocation in the Private Placement.

New shares pertaining to the Offer Shares in Tranche 1 will be issued pursuant to an authorisation (the “Board Authorisation”) granted to the Board by the Company’s annual general meeting held on 19 May 2021. The issue of new shares pertaining to the Offer Shares in Tranche 2 is subject to approval of the Company’s extraordinary general meeting expected to be held on or about 29 April 2022 (the “EGM”).

If the EGM does not approve the issuance of the Offer Shares in Tranche 2, the Company will not receive any proceeds from the sale of Offer Shares in Tranche 2. The effective reduction in proceeds to the Company will in such event be allocated both to the Indre Harøy phase 2 funding and the Kraft Laks expansion. For the latter, the Company will seek to portion out the smolt build-out and potentially partly rely upon external sourcing of smolt for a period of time. It is emphasised that no decision for commencing the Phase 2 project has been made, and reference is made to the Company announcement dated 7 February 2022 and 10 February 2022 for further information.

The completion of Tranche 1 and Tranche 2 by delivery of the Offer Shares to applicants is subject to: (i) the Board resolving to proceed with the Private Placement and to allocate the Offer Shares; (ii) the Board resolving the issuance of the Offer Shares in Tranche 1 pursuant to the Board Authorisation; and (iii) the Board resolving to call for the EGM to (among others) propose to resolve the issuance of the Offer Shares in Tranche 2 (jointly, the “Conditions”). There can be no assurance that these Conditions will be satisfied. If the Conditions are not satisfied, the Private Placement may be revoked or suspended without any compensation to applicants.

Subject to the satisfaction of the Conditions, settlement is expected to take place on or about 8 April 2022 on a delivery versus payment basis.

The Tranche 1 portion of the Share Loan will be settled with new shares in the Company to be issued following, and subject to, approval of Tranche 1 by the Board pursuant to the Board Authorization. Stette Invest AS and Rofisk AS’ portion of the Share Loan will be settled in full in connection with the settlement of the Tranche 1 portion of the Share Loan. The Tranche 2 portion of the Share Loan is with Ronja Capital II AS only and will be settled with either: (i) new shares in the Company to be issued following, and subject to, approval of Tranche 2 by the EGM; or (ii) cash equal to the Offer Shares allocated in Tranche 2 multiplied with the Offer Price if, and only if, the EGM does not approve Tranche 2. Tranche 2 may thus end up being a sale of existing shares by Ronja Capital II AS if the EGM does not approve Tranche 2. Consequently, if the EGM does not approve Tranche 2, the proceeds from the sale of Offer Shares in Tranche 2 will be for the benefit of Ronja Capital II AS, and the Company will not receive any proceeds from Tranche 2 in such circumstance. Therefore, completion of both Tranche 1 and Tranche 2 by delivery of Offer Shares to applicants will not be subject to approval by the EGM and the Private Placement investors’ acquisition of Offer Shares allocated to them in Tranche 1 and Tranche 2 will remain final and binding and cannot be revoked, cancelled or terminated by the respective investors if, for whatever reason, the EGM does not appove the issue of new shares in Tranche 2. By applying for Offer Shares in the Private Placement, the applicants allocated Offer Shares in the Private Placement will undertake to vote in favour of the approval of Tranche 2, and if applicable the Subsequent Offering (as defined below), at the EGM. Such undertakings apply to all shares in the Company held or controlled by the applicants (directly or indirectly) at the date of the EGM.

The Company reserves the right, at any time and for any reason, to cancel, and/or modify the terms of, the Private Placement prior to completion. Neither the Company nor the Managers will be liable for any losses incurred by applicants if the Private Placement is cancelled, irrespective of the reason for such cancellation.

Potential Subsequent Offering

Subject to, inter alia, completion of the Private Placement, approval by the EGM and prevailing market price of the Company’s shares, the Board will consider whether it is appropriate to carry out a subsequent offering (the “Subsequent Offering“) at the Offer Price. Any such Subsequent Offering, if applicable and subject to applicable securities laws, would be directed towards existing shareholders in the Company as of 5 April 2022 (as registered with the VPS two trading days thereafter) who (i) were not included in the pre-sounding phase of the Private Placement, (ii) were not allocated Offer Shares in the Private Placement, and (iii) are not resident in a jurisdiction where such offering would be unlawful, or would (in jurisdictions other than Norway) require any prospectus filing, registration or similar action. The Company reserves the right in its sole discretion to not conduct or to cancel the Subsequent Offering.

Advisors

The Company has appointed ABG Sundal Collier ASA, DNB Markets (a part of DNB Bank ASA), Nordea Bank Abp (filial i Norge) and Pareto Securities AS as Joint Bookrunners. Advokatfirmaet BAHR AS is acting as legal advisor to the Company