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Salmon Evolution ASA – Signed agreement for new NOK 1,550 million green debt financing package

Stock exchange notice

Salmon Evolution ASA (“Salmon Evolution” or the “Company”, OSE: SALME) is pleased to announce that it has entered into a binding loan agreement with DNB and Nordea (the “Lenders”) for a new green debt financing package totalling NOK 1,550 million relating to phase 1 and 2 at Indre Harøy.

The new debt financing package consists of the following facilities:

  • NOK 525 million non-amortizing Term Loan Facility which will refinance the Company’s existing NOK 525 million construction loan relating to phase 1 (the “Term Loan”)
  • NOK 250 million RCF Capex Facility available for general corporate purposes including Indre Harøy phase 2 capex (the “RCF Facility”)
  • NOK 775 million Construction Facility available for financing of capex relating to phase 2 at Indre Harøy (the “Construction Facility”)

The new debt financing package is the result of a thorough process with strong interest from a number of leading banks following the Company’s strong operational development over the last year and will have several positive effects for the Company:

  • Improved cash flow following the refinancing of the Company’s existing construction loan into a non-amortizing term loan
  • Significantly lower margin
  • Significant financial flexibility to finance early phase 2 capex at Indre Harøy

All facilities have a 3 year term with 2×1 year extension options. Furthermore, the debt financing package allows for an increase of the Company’s existing overdraft facility related to working capital financing from current NOK 100 million to NOK 300 million.

Indre Harøy phase 2 capex is currently estimated to NOK 1,600 – 1,700 million with the new RCF Facility and Construction Facility representing a total financing of NOK 1,025 million, implying an incremental loan to value of around 60-65%. The remaining capital requirements are planned financed by cash at hand, operational cash flow, equity or other sources.

The Company has not taken any material investment decision or entered into any definitive construction agreement as to Indre Harøy phase 2 and maintains full flexibility both as to timing and spending. Furthermore, upon a potential investment decision, the Company currently expects moderate investments the first 6-9 months of the project.

The RCF Facility will be fully available upon closing which is expected during April 2023 providing the Company with significant flexibility to finance early phase 2 capex. Utilisation of the Construction Facility is subject to customary conditions, including sufficient new equity demonstrating that phase 2 is fully financed as approved by the Lenders.

As stated in the Q4 2022 report, the Company is on track for profitable farming operations in Q2 2023 and steady state production from late Q3 2023.

 

For further information, contact:

Trond Håkon Schaug-Pettersen
CEO, Salmon Evolution                                
+47 911 91 327          

        

About Salmon Evolution

Salmon Evolution is a Norwegian land-based salmon farming company targeting a production capacity of 100,000 tonnes HOG by 2032. The Company’s core focus is on extending the ocean’s potential by transferring the best preconditions offered by the sea to farm fish on land through its chosen hybrid flow-through system technology (HFS). This secures a truly sustainable production process with controlled and optimal growth conditions and limiting operational and biological risk. 

The Company’s first production facility is strategically located at Indre Harøy on the Norwegian west coast with unlimited access to fresh seawater, renewable energy, established infrastructure, and an educated and experienced work force. Phase 1 is already in operation and will have an annual capacity of 7,900 tonnes HOG at steady state. Fully developed, the Indre Harøy facility will have an annual capacity of 31,500 tonnes HOG.

The Company has also entered into a joint venture with Dongwon Industries where the parties will develop, construct and operate a land-based salmon farming facility in South Korea with an annual production capacity of 16,800 tonnes HOG, using Salmon Evolution’s chosen HFS technology.

Furthermore, Salmon Evolution has initiated a process with the aim of establishing a land-based salmon farming operation in North America.

Salmon Evolution ASA is listed on Oslo Børs under the ticker SALME.

To learn more, please visit www.salmonevolution.no

Forward-looking information 

Matters discussed in this announcement may constitute forward-looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as “believe”, “aims”, “expect”, “anticipate”, “intends”, “estimate”, “will”, “may”, “continue”, “should” and similar expressions. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies, and other important factors which are difficult or impossible to predict and are beyond its control. Such risks, uncertainties, contingencies, and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. Forward-looking statements speak only as of the date they are made and cannot be relied upon as a guide to future performance. The Company expressly disclaims any obligation or undertaking to update, review or revise any forward-looking statement contained in this announcement whether as a result of new information, future developments or otherwise.