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Atlantic Sapphire ASA (“Atlantic Sapphire” or the “Company”, and together with its consolidated subsidiaries, the “Group”) has retained Arctic Securities AS and DNB Markets, a part of DNB Bank ASA (the “Managers”) as Joint Bookrunners in connection with a private placement (the “Private Placement”) to raise gross proceeds of the NOK equivalent of approximately USD 65 million in new shares to be issued by the Company (the “Offer Shares”). The price per Offer Share in the Private Placement is set to a fixed price of NOK 1.40 (the “Offer Price”).
Based on a limited wall-crossing 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 reach an estimated EBITDA break-even for Phase 1 during H1 2024, with a cash buffer. The Company 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 utilizing excess buffer towards finalizing investment in the new Phase 1 & 2 chiller plant.
The following existing shareholders have pre-committed to subscribe for Offer Shares in the Private Placement:
• Condire Investors, LLC for the NOK equivalent of minimum USD 12.5 million
• Nordlaks Holding AS, one the largest and most profitable family-owned salmon farming companies in the world, for the NOK equivalent of USD 9 million
• Strawberry Equities AS for its pro-rata share (8.34% of the Private Placement)
• Blue Future Holding AS owned by EW Group, a leading global provider of animal genetics, nutrition and health products, for its pro-rata share (3.84% of the Private Placement)
Further, the following primary insiders and employees have pre-committed to subscribe for Offer Shares in the Private Placement:
- André Skarbø, board member, through his company ASInvest AS, for its pro-rata share (1.08% of the Private Placement);
- Jon-Birger Løvik, COO, for NOK 1,000,000;
- Karl Øystein Øyehaug, CFO, for USD 20,000;
- Damien Claire, CSMO, for USD 30,000; and
- Svein Taklo, CDIO, for USD 20,000
The application period for the Private Placement will commence on 19 September 2023 at 16:30 CEST and end on 20 September 2023 at 08:00 CEST. The Company may, however, at its sole discretion and in consultation with the Managers extend or shorten the application period at any time and for any reason. If the application period is extended or shortened, the other dates referred to herein might be changed accordingly.
The Private Placement is directed towards Norwegian and international investors, subject to applicable exemptions from relevant registration, filing and offering prospectus requirements, and subject to other applicable selling restrictions. The minimum application and allocation amount has been set to the NOK equivalent of EUR 100,000. The Company may however, at its sole discretion, allocate amounts below EUR 100,000 to the extent exemptions from the prospectus requirement in accordance with applicable regulations, including the Norwegian Securities Trading Act and ancillary regulations, are available.
A presentation prepared in connection with the Private Placement is attached to this stock exchange notice.
Bank debt update
In the Company’s stock exchange notice issued on 24 August 2023, the Group announced an estimated breach of the USD 15 million minimum liquidity covenant under the Group’s credit arrangements. Subject to completion of the Private Placement, the Group has now received a waiver from such breach from its lender, DNB Bank ASA (the “Lender”). Further, adjustments to the minimum EBITDA covenant are made.
Subject to the Company raising at least USD 60 million in the Private Placement, the Lender has also accepted to release up to USD 10 million of the Phase 2 term debt earlier in order to fund the completion of the new Phase 1 & 2 chiller plant. Such funding will at the earliest be available six months following entry into of the required amendment agreements, and is also subject to certain incurrence tests, such as achieving a certain annualized harvest level from Phase 1.
Settlement and conditions
The Private Placement consists of one tranche with up to 55,000,000 Offer Shares (“Tranche 1”) and a second tranche with a number of Offer Shares which results in a total transaction (i.e., both tranches) that equals the final offer size (“Tranche 2”). The tranches will be settled on a delivery versus payment (“DVP”) basis facilitated through a pre-funding agreement to be entered into between the Company and the Managers.
Delivery of Tranche 1 Offer Shares will be made on a DVP basis on or about 22 September 2023 and the Offer Shares in Tranche 1 are expected to be tradeable following registration of the share capital increase relating to the Tranche 1 Offer Shares in the Norwegian Registry for Business Enterprises (“NRBE”) and registration of the Tranche 1 Offer Shares in Euronext Securities Oslo (“VPS”). Delivery of Tranche 2 Offer Shares will be made on a DVP basis on or about 13 October 2023, following approval of Tranche 2 by the EGM, registration of the capital increase relating to the Tranche 2 Offer Shares in the NRBE and registration of the Tranche 2 Offer Shares in the VPS.
The Tranche 2 Offer Shares will initially be delivered on a separate ISIN as the listing of the Tranche 2 Offer Shares requires the preparation and publication of the prospectus (the “Prospectus”) approved by the Norwegian Financial Supervisory Authority before such shares can be listed on the Oslo Stock Exchange, currently expected within mid-October 2023. The Prospectus is contemplated to be a combined prospectus for listing of the Offer Shares in Tranche 2 and for the potential Subsequent Offering (as defined below).
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. Further, the Managers are expected to pre-fund the relevant parts of the Private Placement to order to facilitate a swift registration of the share capital increases.
Completion of the Private Placement by delivery of Offer Shares to investors is subject to all necessary corporate resolutions being validly made by the Company, including the Company’s Board of Directors (the “Board”) resolving to complete the Private Placement, at its sole discretion, including by resolving to increase the share capital and issue the Tranche 1 Offer Shares. Furthermore, delivery of Tranche 1 Offer Shares is subject to registration of the share capital increase pertaining to the issuance of the Tranche 1 Offer Shares with the NRBE and the registration of the Tranche 1 Offer Shares in the VPS. Completion of delivery of the Tranche 2 Offer Shares to applicants is further subject to (i) an extraordinary general meeting of the Company to be held on or about 11 October 2023 (the “EGM”) resolving the share capital increases pertaining to the issuance of the Tranche 2 Offer Shares, and (ii) registration of the share capital increases pertaining to the issuance of the Offer Shares in Tranche 2 with the NRBE and the registration in the VPS.
By applying for the Offer Shares, the applicants allocated Offer Shares will undertake to vote for all of their shares in the Company in favour of the Private Placement and, if applicable the Subsequent Offering, at the EGM.
Subject to the completion of the Private Placement, customary lock-up agreements are expected to be entered into with the following individuals and their related companies:
• Key management (CEO Johan E. Andreassen, CFO Karl Øystein Øyehaug, COO Jon-Birger Løvik and CDIO Svein Taklo): 90 days
• Board members: 90 days
• The Company: 180 days
Equal treatment
The Board has considered the Private Placement in light of the equal treatment obligations under the Norwegian Public Limited Companies Act, the Norwegian Securities Trading Act, Oslo Børs’ Circular no. 2/2014 and the rules on equal treatment under Oslo Rule Book II for companies listed on the Oslo Stock Exchange, and is of the opinion that the contemplated Private Placement is in compliance with these requirements.
In reaching this conclusion, the Board has particularly emphasized that the waiver from the breach of the minimum liquidity covenant and the earlier access to USD 10 million of the Phase 2 term debt, as described above, is subject to completion of the Private Placement. Further, the share issuance will be carried out as a private placement in order to complete a transaction in an efficient manner, and without the need for a guarantee consortium.
On the basis set out above, and based on an assessment of the current equity markets, the Board has considered the Private Placement to be in the common interest of the Company and its shareholders. As a consequence of the Private Placement structure, the shareholders’ preferential rights to subscribe for the Offer Shares will be deviated from.
Potential Subsequent Offering
Subject to, among other things, completion of the Private Placement, approval by the EGM and the market price of the Company’s shares, the Board will consider whether it is in the Company’s best interest to carry out a subsequent share offering (the “Subsequent Offering”) at the Offer Price. Any such Subsequent Offering would be directed towards existing shareholder in the Company as of 19 September 2023 (as registered in the VPS on 21 September 2023) 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 cancel the Subsequent Offering.
Advisors
Arctic Securities AS and DNB Markets, a part of DNB Bank ASA, are acting as Joint Bookrunners in the Private Placement.
Advokatfirmaet CLP DA is acting as a legal advisor for the Company in connection with the Private Placement. Advokatfirmaet BAHR AS is acting as legal advisor to the Managers in connection with the Private Placement.
For further information, please contact:
Johan E. Andreassen, CEO, Atlantic Sapphire ASA;
or
Karl Øystein Øyehaug, CFO, Atlantic Sapphire ASA
investorrelations@atlanticsapphire.com
About Atlantic Sapphire ASA
Atlantic Sapphire is pioneering Bluehouse® (land-raised) salmon farming, locally, and transforming protein production, globally. Atlantic Sapphire has been operating its innovation center in Denmark since 2011 with a strong focus on R&D and innovation to equip the Company with the technology and procedures that enable the Company to commercially scale up production in end markets close to the consumer.
In the US, the Company has identified and obtained the requisite permits to construct its Bluehouse® in the ideal location in Homestead, Florida, just south of Miami. The Company has completed Phase 1 construction, which provides the capacity to harvest approximately 10,000 tons (HOG) of salmon annually. The Company completed its first commercial harvest in the US in September 2020. Atlantic Sapphire is currently constructing its Phase 2 expansion, which will bring total annual production capacity to 25,000 tons, and has a long-term targeted harvest volume of 220,000 tons.
This information was considered to be inside information pursuant to the EU Market Abuse Regulation. This stock exchange announcement was published by Karl Øystein Øyehaug, CFO, on the time and date provided.
Important information
This announcement is not and does not form a part of any offer to sell, or a solicitation of an offer to purchase, any securities of Atlantic Sapphire. The distribution of this announcement and other information may be restricted by law in certain jurisdictions. The release is not for publication or distribution, in whole or in part directly or indirectly, in or into Australia, Canada, Japan or the United States (including its territories and possessions, any state of the United States and the District of Columbia). This release is an announcement issued pursuant to legal information obligations and is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act. It is issued for information purposes only, does not purport to be full or complete and does not constitute or form part of any offer or solicitation to purchase or subscribe for securities, in the United States or in any other jurisdiction where such offer of solicitation is unlawful. The securities mentioned herein have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “US Securities Act”), or under the applicable securities laws of Australia, Canada or Japan. The securities may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the US Securities Act and in accordance with applicable United States state securities laws. The Company does not intend to register any portion of the offering of the securities in the United States or to conduct a public offering of the securities in the United States. Copies of this announcement are not being made and may not be distributed or sent into Australia, Canada, Japan or the United States. Any sale in the United States of the securities mentioned in this announcement will be made solely to “qualified institutional buyers” as defined in Rule 144A under the US Securities Act as well as to major U.S. institutional investors under SEC Rule 15a-6 to the United States Exchange Act of 1934.
The issue, subscription or purchase of shares in the Company is subject to specific legal or regulatory restrictions in certain jurisdictions. Neither the Company nor the Managers assume any responsibility in the event there is a violation by any person of such restrictions.
In any EEA Member State, this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Regulation, i.e., only to investors who can receive the offer without an approved prospectus in such EEA Member State. The expression “Prospectus Regulation” means Regulation (EU) 2017/1129 as amended (together with any applicable implementing measures in any Member State).
In the United Kingdom, this communication is only addressed to and is only directed at “qualified investors” within the meaning of Regulation (EU) 2017/1129 as it forms part of the laws of the United Kingdom by virtue of the European Union (Withdrawal) Act 2018 (including any statutory instruments made in exercise of the powers conferred by such act) who (i) are investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the “Order”) or (ii) are persons falling within Article 49(2)(a) to (d) of the Order (high net worth companies, unincorporated associations, etc.) (all such persons together being referred to as “Relevant Persons”). These materials are directed only at Relevant Persons and must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this announcement relates is available only to Relevant Persons and will be engaged in only with Relevant Persons. Persons distributing this communication must satisfy themselves that it is lawful to do so.
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 “anticipate”, “believe”, “continue”, “estimate”, “expect”, “intends”, “may”, “should”, “will” 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. The information, opinions and forward-looking statements contained in this announcement speak only as at its date and are subject to change without notice. This announcement is made by, and is the responsibility of, the Company. The Managers are acting exclusively for the Company and no one else and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients, or for advice in relation to the contents of this announcement or any of the matters referred to herein. The Managers and their respective affiliates disclaim 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.
The distribution of this release may in certain jurisdictions be restricted by law. Persons into whose possession this release comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.
Neither the Managers nor any of their respective affiliates makes any representation or warranty, express or implied, as to the accuracy and completeness of this announcement (or whether any information has been omitted from the announcement) or as to any other information relating to the Company its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith, and none of them accepts any responsibility for the contents of this announcement or any matters referred to herein. This announcement is for information purposes only and is not to be relied upon in substitution for the exercise of independent judgment. It is not intended as investment advice and under no circumstances is it to be used or considered as an offer to sell, or a solicitation of an offer to buy any securities or a recommendation to buy or sell any securities of the Company. Neither the Managers nor any of their respective affiliates accepts any liability arising from the use of this announcement.
In connection with any offering of the shares, the Managers and any of their affiliates acting as an investor for their own account may take up as a principal position in any shares and in that capacity may retain, purchase or sell for their own accounts such shares. In addition, they may enter into financing arrangements and swaps with investors in connection with which they may from time to time acquire, hold or dispose of shares. They do not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligation to do so.
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