Norwegian cod farmer raises $20m to boost volumes and fund new sites

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Norwegian cod farmer Norcod has raised NOK 175m (€18.1m/$20m) in a private equity placement that will be used to increase biomass and develop two new sites .

Just over 2.1 shares were sold at a subscription price of NOK 80 (€8.28/$9.13), hitting the upper limit of Norcod’s target to raise gross proceeds of between 150 million NOK ($17 million/€15.6 million) and NOK 175 million ($20 million/€18.2 million).

The placement settlement is expected to use existing shares already listed on the Euronext Growth Oslo market, which will be borrowed from current shareholders Ronja Capital and Sirena Group under a share loan agreement.

In January, Norcod struck a deal with a Spanish supermarket chain that raised harvest volume forecasts by 10%.

The deal with the anonymous retailer is for 850 metric tonnes of cod with a fixed gross price of NOK 60 (€5.90/$6.67) per kilogram delivered to Spain.

The deal quickly followed the healings of Norcod’s partnership with Myre-based Vesteralen Havbruk to process all of its farmed cod from its Frosvika facility in northern Norway, covering crops up to 10,000 metric tons per year.

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Norcod also reported higher third-quarter revenues thanks to its first major commercial crop. However, the higher costs associated with fish production have pushed profits into the red.

The company recorded operating losses of NOK 8.1 million (€821,155/$950,753) compared to a profit of NOK 9.7 million (€983,359/$1.1 million) in the same period of 2020 .

Its first significant sales revenue was NOK 15.9 million (€1.6 million/$1.9 million) for the quarter, compared to a negligible NOK 387,000 (€39,233/$45,425) in 2020, but sales could not compensate for the relative increase. the costs of harvesting the small volume of fish over the period.

The initial harvest period is considered one of the most important milestones for Norcod, which has been working for four years to begin production along the Norwegian coast. From the beginning of the harvest in mid-August to the end of the quarter, 345 metric tons (round weight) were harvested.

“This very important milestone is a proof of concept, demonstrating that Norcod has achieved commercially viable and biologically superior farmed cod, which sets the stage for a positive and lucrative future for the industry,” the company said.

A consignment of 2.4 million fish was also transferred to three sea sites at the company’s sites in Meloy and Froya last summer.

The company has also begun construction of its new cod fry plant, Havlandet Norcod, through its 50-50 joint venture with Havlandet Marin Yngel, and is recruiting additional operational staff.

This production site, which has a license to produce 24 million fingerlings per year, will be ready to receive its first fingerlings in the fall of 2022.

The company said it was “on track” to process an expected volume of 5,000 metric tons over the next few months.

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