Gigante Salmon share issue raises more than £16m

Land-based fish farmer Gigante Salmon successfully raised at least NOK 225 million (£16.6m) in a new share issue in Oslo last night.

The deal was completed through the issue of 34.6 million shares at an average price of NOK 6.50 per share.

Gigante Salmon, which is based in northern Norway, said in a Stock Exchange announcement that it plans to use the net proceeds to fund the company’s projected investment and working capital needs for the construction and operation of the land based salmon farming site on Lille Indre Rosøy in Rødøy municipality (also known as the “Rødøy facility”) as well as for general corporate purposes.

It continued: “The company is pleased to announce that the book-building for the private placement has been successfully completed.

“On the back of strong investor demand, the company decided to increase the size of the private placement from NOK 200 million to NOK 225 million in gross proceeds through the allocation of 34,615,384 new shares.”

The company is building one of Norway’s most advanced RAS (recirculating aquaculture system) facilities. The development phase is now moving towards conclusion and production is expected to get underway later this year.

The Gigante Salmon statement added: “The board is of the view that it will be in the common interest of the company and its shareholders to raise equity through a private placement, in particular because the private placement enables the company to secure equity financing to accommodate the company’s funding requirements for construction of the Rødøy facility on a short timeline.

“Further, a private placement will reduce execution and completion risk, as it enables the company to raise equity efficiently and in a timely manner, with a lower discount to the current trading price, at a lower cost and with a significantly reduced completion risk compared to a rights issue.”

Earlier this year, Gigante changed its CEO, appointing Kjell Lorentsen to replace Helge Albertsen, after it emerged that construction costs at the Rødøy plant were running far above the initial estimate.