Image: Salmon Evolution / FIS
Salmon Evolution ASA – for new NOK 1,550 million (USD 148.66 M) green debt financing package
Thursday, March 30, 2023, 07:00 (GMT + 9)
Salmon Evolution ASA ("Salmon Evolution" or the "Company", OSE: SALME) is pleased to announce that it has entered into a binding loan agreement with DNB and Nordea (the “Lenders”) for a new green debt financing package totalling NOK 1,550 million (USD 148.66 M) relating to phase 1 and 2 at Indre Harøy.
Image: REGlobal / Salmon Evolution / FIS
The new debt financing package consists of the following facilities:
- NOK 525 million (USD 50.35 M) non-amortizing Term Loan Facility which will refinance the Company’s existing NOK 525 million (USD 50.35 M) construction loan relating to phase 1 (the “Term Loan”)
- NOK 250 million (USD 23.98 M) RCF Capex Facility available for general corporate purposes including Indre Harøy phase 2 capex (the “RCF Facility”)
- NOK 775 million (USD 74.33 M) Construction Facility available for financing of capex relating to phase 2 at Indre Harøy (the “Construction Facility”)
The new debt financing package is the result of a thorough process with strong interest from a number of leading banks following the Company’s strong operational development over the last year and will have several positive effects for the Company:
- Improved cash flow following the refinancing of the Company’s existing construction loan into a non-amortizing term loan
- Significantly lower margin
- Significant financial flexibility to finance early phase 2 capex at Indre Harøy
Image: Archivo FIS
All facilities have a 3 year term with 2x1 year extension options. Furthermore, the debt financing package allows for an increase of the Company’s existing overdraft facility related to working capital financing from current NOK 100 million (USD 9.59 M) to NOK 300 million (USD 28.77 M).
Indre Harøy phase 2 capex is currently estimated to NOK 1,600 – 1,700 million (USD 154.35 M - 160.05 M) with the new RCF Facility and Construction Facility representing a total financing of NOK 1,025 million (USD 98.31 M), implying an incremental loan to value of around 60-65%. The remaining capital requirements are planned financed by cash at hand, operational cash flow, equity or other sources.
The Company has not taken any material investment decision or entered into any definitive construction agreement as to Indre Harøy phase 2 and maintains full flexibility both as to timing and spending. Furthermore, upon a potential investment decision, the Company currently expects moderate investments the first 6-9 months of the project.
The RCF Facility will be fully available upon closing which is expected during April 2023 providing the Company with significant flexibility to finance early phase 2 capex. Utilisation of the Construction Facility is subject to customary conditions, including sufficient new equity demonstrating that phase 2 is fully financed as approved by the Lenders.
As stated in the Q4 2022 report, the Company is on track for profitable farming operations in Q2 2023 and steady state production from late Q3 2023.
Source: Salmon Evolution