“Ocean Farm 1” licence conversion, a bargain now at €142 million

News
510

Development of the innovative ocean rig “Ocean Farm 1” has paid off for SalMar.

Yesterday morning, it was announced that SalMar was converting eight development concessions, linked to the ocean rig “Ocean Farm 1”, into ordinary salmon farm permits.

SalMar paid around EUR 100,000 each for the development licences.

When converted into freely negotiable salmon farm licences, the value of ordinary salmon in Norway is currently raised by EUR 19 million – each.

Conversion
“In accordance with the regulations, NOK 11,046,400 (EUR 100,000 .ed) must be paid in consideration per permit for conversion. The mentioned conversion is not possible without the measurement criteria the government has set for the conversion is met. This has thus cost approximately NOK 1 billion (EUR 94 million .ed) in investments in addition to the NOK 88.4 million (EUR 8.3 million .ed)in order to convert,” explained SalMar’s investor relations contact, Håkon Husby to SalmonBusiness.

“Besides the conditions set for conversion in the response to the application for convenation from the Directorate of Fisheries, there are no other restrictions on the licences. SalMar will use the permits to produce fish and develop an even more sustainable aquaculture industry on salmon conditions, which this scheme has made possible,” he added.

Millions in profits
So when SalMar paid around EUR 8 million for its eight development licences, they can now value these at EUR 150 million. The paper gain will consequently be EUR 142 million.

However, the gains will be a theoretical size, as SalMar is unlikely to have plans to sell. On the contrary, the company’s management has repeatedly been eager for increased production growth, not least offshore. And then they need more licences.