Latest Atlantic Sapphire private placement nets USD 65 million

Atlantic Sapphire, which is working to build one of the largest salmon recirculating aquaculture system (RAS) facilities in the world in Miami, Florida, U.S.A, recently raised NOK 702 million (USD 65 million, EUR 61 million) in funding via a private placement. 

The company announced it received the funds through the placement of over 501 million new shares at a new share price of NOK 1.40 (USD 0.13, EUR 0.12). The company announced the contemplated private placement on the Oslo Børs on 19 September, and then announced the successful private placement eight hours later on the same day.

Atlantic Sapphire said proceeds from the placement will be used to achieve an estimated break-even on its earnings before interest, taxes, depreciation, and amortization (EBITDA) in H1 2024, with a cash buffer. 

Nordlaks Holding AS, described by Atlantic Sapphire as a close associate of the company’s deputy chairman, Eirik Welde, purchased the largest portion of the private placement. Nordlaks Holding reported acquiring over 69.4 million shares, with a total value of roughly NOK 97.2 million (USD 9 million, EUR 8.5 million). 

The second largest investor was Strawberry Capital, an associate of Atlantic Sapphire Board Chairman Jarl Andersen, which purchased over 41.8 million shares at the offer price, equating to a subscription of approximately NOK 58.5 million (USD 5.4 million, EUR 5.1 million). 

The company said that it will hold a subsequent offering of up to 100 million shares, with further proceeds of NOK 140 million (USD 12.9 million, EUR 12.2 million). The second tranche of the private placement is subject to approval by the board at an extraordinary general meeting, which the company said will take place “on or about 11 October, 2023.”

The successful private placement comes after the company had a difficult start to 2023. In its H1 2023 results, it said it expected to breach its Q3 2023 financial covenants due to reductions in revenue and operational cash flow. The breach was enough that investor DnB equity reportedly sold off its funds in the company, according to Dagens Næringsliv.   

The breach in financial covenants was partially the result of the company's 233 percent jump in losses related to problems at its Miami, Florida-based production facility. 

In early August, the company posted that “elevated farming temperatures” had impacted its water quality at its Florida Bluehouse farm, requiring it to install new water chillers to ensure sufficient water capacity for its salmon farming operations at peak cooling demand. 

As part of its private placement announcement, the company said it is deploying rental chillers that it estimates will bring water temperatures back into 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 one and two chiller plant,” Atlantic Sapphire said.  

Photo courtesy of Atlantic Sapphire