Atlantic Sapphire announces $65 million share issue

Matthew Wilcox

Access to Phase 2 funding is contingent upon the successful completion of the company’s share issue.

Troubled land-based farmer Atlantic Sapphire is to launch a private placement to raise $65 million in new shares, setting the offer price at NOK 1.40 per share, the company announced on Tuesday.

After reporting reduced revenue in the first half of 2023 due to water temperature problems affecting production at the farm, the company faces another challenge in a series of setbacks for the project.

Read more: Shipping dynasty dumps Atlantic Sapphire in shock $4.5m bloodbath

The company has appointed Arctic Securities and DNB Markets as joint bookrunners for the placement. Following a limited preliminary exercise, the managers have received enough indications of interest to cover the private placement at the commencement of the application period.

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.

Helped by the funds the company said it will deploy rental chillers estimated to bring water temperatures back to budgeted levels.

Hired mobile cooling systems en route to Atlantic Sapphire’s facility in Florida. Photo: Johan Andreassen

Condire Investors, Nordlaks, Strawberry Equities, and Blue Future Holding have all committed in advance to the upcoming share issue.

Condire will contribute $12.5 million, while Nordlaks has pledged $9 million. Strawberry Equities is set to cover their pro-rata share, which amounts to 8.34 percent of the directed issue, and Blue Future Holding, owned by the global leader EW Group in animal genetics, nutrition, and health products, has committed to its pro-rata share of 3.84 percent of the issue.

Company insiders including André Skarbø, Jon-Birger Løvik, Karl Øystein Øyehaug, Damien Claire, and Svein Taklo have also pre-committed to the offering.

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 has 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.


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