Atlantic Sapphire ASA (the “Company”) announces plans to upsize its US ‘phase 2’ expansion of the Miami Bluehouse®, increasing the annual production and harvest volume of the combined phase 1 and 2 by approximately 18,500t RLW (15,000t HOG) to 30,000t RLW (25,000t HOG). The first fish is expected to be stocked into the new phase 2 facility in 2022, with increased harvest volumes starting in 2023.
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Phase 2 will be integrated with phase 1 production, as the fish will hatch and grow to smolt size in the existing phase 1 smolt facility, then be transferred to phase 2 for the mid-cycle stage (0.3 – 3.0kg) before finally being moved into the existing phase 1 grow-out tanks for the last stage of its life cycle. This is advantageous, as the existing phase 1 has sufficient smolt, harvesting and filleting capacity to support the full 25,000t HOG. Further, increased smolt production while phase 2 is being constructed allows for rapid utilization of the new phase 2 capacity, decreasing construction completion to harvest ramp-up by approximately 10 months.
The phase 1 grow-out systems are designed for large fish (3-5kg), and the Company will optimize production by stocking mid-sized fish with higher specific growth rate (SGR) in tailor-made systems in phase 2. The ratio of filtration capacity versus tank size will improve for the combined phase 1 and 2, allowing for a higher JEA index (kg yield/m3 tank volume/day). Consequently, phase 2 will be a less complex project as compared to phase 1 with a lower capex per kilo of incremental production.
Phase 2 will include centralized functions for sludge treatment, maintenance and energy, as part of the Grand Master Plan. These will be based on a modular design that allows for rapid expansion in future phases, reduces operational complexity and improves reliability.
The Company is currently working on the design, construction plan and budget for the expansion and expects to announce more details in Q2 2021.
In connection with the revised US phase 2 buildout plan, the Company has modified the commitments under its existing credit facility to better align with its projected liquidity requirements for 2021, thereby reducing projected financial costs associated with its debt financing.
As part of the strategy to increase its access to lenders, the company has syndicated a portion of its existing credit facility to Farm Credit. The Company is planning to syndicate additional portions of the facilities once the final budget and construction timeline for phase 2 is completed.
Johan E. Andreassen, Chairman of the Company, commented: “We’re proud to get Farm Credit in on the lender side together with DNB, supporting our current and future growth ambitions. For Atlantic Sapphire, it is important to work with banks that truly understand the business of producing sustainable, high-quality proteins, and we believe there is no better team of industry experts than DNB and Farm Credit to partner with us on that mission.”
The Company’s existing US$150 million credit facility has been increased to US$200 million, which is comprised of a fully-drawn US$50 million term loan, a US$ 20 million revolving credit facility and a US$ 32 million committed term loan for phase 2 capital expenditures with a US$98 million uncommitted accordion facility on the same terms and conditions as the Company’s committed term loans.
Johan E. Andreassen further commented that “given the significant construction and operational milestones reached in 2020, including consistent weekly harvest of US premium Bluehouse Salmon® since September 2020, Atlantic Sapphire has entered 2021 with a strong balance sheet and operational cash flow.”
The senior secured debt facility is labelled green in line with the criteria listed in the Company’s Green Finance Framework, where the Company has received a second party opinion from CICERO Shades of Green giving the framework a Medium Green score and confirming its alignment with the LMA/LSTA Green Loan Principles. The Company’s Green Finance Framework and the second party opinion report from Cicero are both attached and will be made available on atlanticsapphire.com/sustainability.
Karl Øystein Øyehaug, Managing Director and Interim CFO of Atlantic Sapphire ASA, commented: “We’re proud to announce that the second party opinion from CICERO rates this credit facility, specifically, as green, but also, more generally, all capital expenditures in Bluehouse® infrastructure as green use of proceeds. Our future expansions will require capital, and we are confident that our creditors will appreciate that they’re part of developing a more sustainable source of healthy proteins, without airfreight and without impact on the ocean. Finally, we’re pleased to acknowledge that the Company’s governance procedures in our green finance framework are found to be ‘Excellent’.”
DNB Markets acted as Green Loan Advisor, assisting the company with the Green Finance Framework.
For further information, please contact:
Johan E. Andreassen
Chairman, Atlantic Sapphire ASA;
Karl Øystein Øyehaug
Managing Director & Interim CFO, Atlantic Sapphire ASA
investorrelations@atlanticsapphire.com
About Farm Credit of Florida
Farm Credit of Florida is a member-owned agricultural lending cooperative with assets of US$ 1.3 Billion. Farm Credit of Florida provides loans, leases and crop insurance with 13 offices serving Florida, serving over 2,610 farmers, ranchers, growers, aquaculture producers, and rural homeowners across the state. Farm Credit’s mission is to support rural communities and agriculture with reliable, consistent credit and financial services, today and tomorrow. Farm Credit of Florida is a member of the nationwide Farm Credit System network of 72 customer-owner financial institutions across all 50 states and Puerto Rico. The Farm Credit System services 571,000 customers nationwide with US$ 287 Billion in total loan volume as of December 31, 2019. Visit FarmCreditFl.com to learn more.
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 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 since 2010 worked to identify and permit the ideal location for Bluehouse® farming in Miami, Florida. The Company is close to completion of its phase 1 build out which is projected to harvest approximately 10,000 tons of salmon annually and performed its first commercial harvest in the US in September 2020. The Company has secured the key US water permits to produce up to 90,000 tons onsite, and has a targeted harvest volume in 2031 of 220,000 tons.
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