Chinese venture capital firm takes 10% stake in Florida land-based salmon farmer.
Land-based salmon farmer Atlantic Sapphire has announced the successful completion of a private placement, which has seen the company raise funds of approximately $65 million, following the conclusion of the company’s extraordinary general meeting on Wednesday.
Hong Kong-based venture capital firm, VLTCM, was a major participant in the placement, acquiring 79.6 million shares. This purchase, revealed in a stock exchange notice on Wednesday, equates to a 10.2 percent stake in the Florida-based salmon producer.
This share acquisition, facilitated at NOK 1.40 per share, saw the allocation of 501,428,571 new shares as part of the private placement.
Atlantic Sapphire’s CEO, Johan Andreassen, conveyed his satisfaction with the placement’s outcome, citing the value of having supportive investors on board.
In an exchange with SalmonBusiness, Andreassen’s message was one of optimism.
Responding to an inquiry about the company’s future trajectory, Andreassen underlined the importance of achieving stability.
“Unfortunately we haven’t had that in Miami since the Bluehouse was built. But we believe we will be able to operate under stable conditions going forward,” said the Atlantic Sapphire CEO. “Then we can prove to ourselves and our owners what we can do.”
Atlantic Sapphire’s shares were trading at NOK 1.46 on Wednesday evening.
The share issue follows Atlantic Sapphire reported lower revenue for the first half of 2023 caused by weaker-than-expected production because of water temperature issues at the farm.
Net proceeds from the share issue will be used to reach an estimated earnings before interest, tax, depreciation and amortisation (EBITDA) break-even for Phase 1 during the first half of 2024, with a cash buffer.
Following a previous announcement on August 24, 2023, where the group indicated a potential covenant breach, the company has secured a waiver from its lender, DNB Bank.
The bank also agreed to release funding for the new Phase 1 & 2 chiller plant upon the successful completion of the private placement.
Earlier this year, Atlantic Sapphire reported a 16.7 percent decline in its first-half revenue to $8 million compared to the previous year. The company recorded an adjusted loss of about $36.4 million. The company’s harvest volume for the first half of the year was 870 metric tons, a 30 percent decline from the previous year.
