Land-based salmon producer Atlantic Sapphire said Friday executives will use the $55 million (€52 million) raised from an oversubscribed share issue this week to shore up the first phase of construction at the company's facility in Miami, Florida.
Atlantic Sapphire CFO Karl Oystein Oyehaug said part of the proceeds of the raise are the result of a longer-than-expected timeline and construction cost inflation for upgrading infrastructure for the 10,000 metric tons head-on-gutted (HOG) capacity first phase of its recirculating aquaculture system (RAS) operation.
"This has delayed reaching steady state harvest volumes and revenue by a quarter or so, which means we need to fund a slightly longer ramp-up period," Oyehaug told IntraFish.
Executives may opt to use the remainder of proceeds for future construction, Oyehaug said.
The company doesn't anticipate any significant capital expenditure (CAPEX) investments in the first phase, he added.
"It’s only about operations and getting to full capacity utilization and profitable production over the next few months," he said.
Shareholders participating in the issue include salmon farming group Nordlaks Holding, which has signed up to take $10 million (€9.4 million) in shares. Strawberry Equities, an investment vehicle for Norwegian billionaire Petter Stordalen will take a $6.5 million (€6.1 million) share of the issue.
The pair are joined by Blue Future Holding, owned by animal nutrition group EW Group, and Johannson Eiendom. Both signed up for NOK 50 million (€4.4 million/$4.6 million).
Atlantic Sapphire finished construction on its first phase in 2021, after receiving approvals to begin construction in 2017, estimating at the time it would $100 million (€89.7 million).The company was one of the first to announce plans for large-scale salmon RAS in the US.
Atlantic Sapphire expects to produce 25,000 metric tons under Phase 2 expansion plans.
In June last year Atlantic Sapphire said it might still have to return to the markets to ensure Phase 2 of project is completed, despite completing a NOK 1.23 billion (€119 million/$124 million) fund raise.
"We have not made a decision on when we want to accelerate the remaining part of Phase 2 construction yet," Oyehaug said.
As well as fire at its Danish site, Atlantic Sapphire has suffered a string of setbacks at its Miami facility over recent years.
Most recently, the company reported that "above normal and increasing mortality" in some of its salmon had spurred early harvests and a lower average weight than originally planned.
Earlier this month, Atlantic Sapphire announced plans to explore the sale of its facility in Denmark that was destroyed by fire in September 2021.
The company said it would plow the DKK 180 million (€24.1 million/$25.5 million insurance settlement into its Miami site.
The setbacks Atlantic Sapphire suffered in 2021 haven’t dampened the company's ambition of achieving an output of 220,000 metric tons of salmon a year at its Florida facility by 2031.
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