Investors lukewarm on AquaCon’s billion dollar plans for land based salmon farming in the US

Aslak Berge

“Land-based salmon farming has been too dependent on the supply of Norwegian venture capital.”

On Wednesday morning, it was announced that the Norwegian start-up company AquaCon has signed a contract with AKVA group and the latter’s new business partner Israel Corp. to build a land-based facility that can produce 16,000 tons of salmon in Maryland. The price tag is US$150 million.

Of this sum, the equipment supplier AKVA group and Israel Corp. entered a US$10 million convertible loan, with an option to invest an additional US$15 million, in the project.

Narrow market
The choice of intermediate financing indicates that AquaCon has not put in place the entire financing package. This was confirmed by Aquacon CEO and former corporate finance officer at SEB and Pareto, Henrik Tangen, to E24.

“Norway is a somewhat cramped market to raise money in during the day, everyone is aware of that. We are now going much wider in our financing process, with strategic and active investors,” said Tangen.

The land-based salmon shares have been hit hard on the Oslo Stock Exchange this year, not least in connection with a number of setbacks for market leader Atlantic Sapphire. Only one of the companies in this sector has risen in value in 2021.

Source: Infront

The model of AKVA group intermediate financing and acting as a bank for its customers is a blueprint of a transaction used by Nordic Aqua Partner for the construction of its facility in Shanghai.

“I personally believe that land-based salmon farming has been too dependent on the supply of Norwegian venture capital. And there is clearly a lot of resistance now,” said AKVA group’s CEO Knut Nesse to E24.

The new facility in Maryland aims for 16,000 tons. However, it is only the first of three facilities in the United States. In total, AquaCon is aiming for a production volume of 45,000 tonnes of salmon on land, according to Dagens Næringsliv.


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