The Offer Shares is expected to be settled with new shares in the Company to be issued under the existing Board authorization to issue new shares

Salmon Evolution ASA: Contemplated Private Placement and Increased Debt Financing

Salmon Evolution ASA (”Salmon Evolution” or the “Company”) announces that it has engaged Arctic Securities AS, DNB Markets, a part of DNB Bank ASA, and Nordea Bank Abp, filial i Norge as Joint Global Coordinators and Joint Bookrunners (together the “Managers”) to advise on and effect a contemplated private placement (the “Private Placement”) of new ordinary shares in the Company (the “Offer Shares”) raising gross proceeds of approximately NOK 350 million.

The price per Offer Share in the Private Placement (“Offer Price”) will be set by the Company’s board of directors (the “Board”) on the basis of an accelerated book-building process to be conducted by the Managers.

Increased debt financing to support Phase 2 build-out

In connection with the contemplated Private Placement the Company has received a commitment letter from certain banks under its existing NOK 1,550 million green loan facilities (as amended, the “Bank Facilities”) to, among other things, (i) increase the commitments under the Bank Facilities with NOK 675 million to a total of NOK 2,225 million for the purpose of partly financing of phase 1, as well as partly financing the construction of phase 2 of the salmon farming facility at Indre Harøy including potential additional tank capacity (“Phase 2”), (ii) extending the final maturity date to 29 March 2027, subject to a further one year extension option (subject to lenders’ consent) and (iii) making certain other amendments to the terms of the Bank Facilities. The commitment is made subject to certain drawdown conditions, customary closing conditions including final documentation and the Private Placement raising gross proceeds of a minimum NOK 300 million. Together with the Private Placement, the total commitments under the Bank Facility is currently estimated to fully fund the Phase 2 build-out at Indre Harøy, with a buffer.

Photo: Salmon Evolution

Improved Phase 2

With the Bank Facilities in place, and subject to completion of the Private Placement, the Company intends to move forward with the build-out of Phase 2 at Indre Harøy. After two years in operation and 6 batches successfully harvested in phase 1, the Company has identified several optimisations in the production plan to be implemented in Phase 2. These optimizations will result in an improved Phase 2, estimated to add another 10,100t HOG capacity to the current phase 1 capacity of 7,900t HOG. As such, total output from phase 1 and Phase 2 is estimated to increase to 18,000t HOG. The increase in planned output from Phase 2 is achieved through added tank capacity leveraging existing infrastructure.

The currently estimated capital expenditure for the improved Phase 2 at Indre Harøy is NOK 2,200 million in addition to NOK 200 million in project contingency, and includes the added tank capacity capex that is currently estimated to approximately NOK 350 million. Further, the Company currently estimates that the construction of Phase 2 will be initiated in Q3 2024, however, no final decisions or agreements are entered into for the construction of Phase 2 nor the potential added tank capacity.

Photo: Salmon Evolution

Terms of the Private Placement

Certain existing shareholders as well as members of management have pre-committed to apply for Offer Shares in the Private Placement for a total of approximately NOK 81 million. The existing shareholders include board-represented shareholders Ronja Capital AS, Bondø Invest AS (and close associates), Dongwon Industries, Stette Invest AS and Jawendel AS, as well as other larger shareholders Farvatn Private Equity AS and Kjølås Stansekniver AS.

Further, the following management primary insiders have indicated to apply for Offer Shares as follows:

• Trond Håkon Schaug-Pettersen (CEO), through Troha Invest AS, for 100,000 shares
• Trond Vadset Veibust (CFO), through Trollkyrkja AS, for 35,000 shares
• Odd Frode Roaldsnes (CCO), through Anno Invest AS, for 25,000 shares

Based on a limited wallcrossing exercise prior to launch, the Managers have received indications of interest to subscribe for Offer Shares so that the Private Placement is covered at the start of the application period.

Photo: Salmon Evolution

The net proceeds from the Private Placement are intended to be used (i) fund the currently estimated equity portion of Phase 2, including potential additional tank capacity, and (ii) for general corporate purposes.

The application period in the Private Placement will commence today, 18 June 2024 at 16:30 CEST and close on 19 June 2024 at 08:00 CEST. The Managers and the Company may, however, at any time resolve to close or extend the application period on short or without notice. If the application period is shortened or extended, any other dates referred to herein may be amended accordingly.

The Private Placement will be directed toward selected Norwegian and international investors (a) outside the United States in reliance on Regulation S under the U.S. Securities Act and (b) to investors in the United States who are QIBs as defined in Rule 144A under  the U.S. Securities Act, in each case subject to an exemption being available from offer prospectus requirements and any other filing or registration requirements in the applicable jurisdictions and subject to other selling restrictions. The minimum application and allocation amount has been set to the NOK equivalent of EUR 100,000 per investor. The Company may, however, at its sole discretion, allocate an amount below EUR 100,000 to the extent applicable exemptions from the prospectus requirement pursuant to the Norwegian Securities Trading Act and ancillary regulations are available. Further selling restrictions and transaction terms will apply.

Allocation and final number of Offer Shares to be issued will be determined at the end of the application period by the Board in its sole discretion based on allocation criteria such as (but not limited to) existing ownership, pre-commitments, price leadership, timeliness of order, relative order size, perceived investor quality, sector knowledge and investment horizon. The Board reserves the right at its sole discretion, to reject and/or reduce any orders, in whole or in part. The Board and the Managers further reserve the right, at their sole discretion, to take into account the creditworthiness of any applicant. There is no guarantee that any potential investor will be allocated shares.

Settlement and Dates

The Offer Shares is expected to be settled with new shares in the Company to be issued under the existing Board authorization to issue new shares (the “Board Authorisation”) granted by the Company’s annual general meeting held on 5 June 2024, and delivery versus payment (“DVP”) settlement is expected to be facilitated by a pre-funding agreement expected to be entered into between the Company and the Managers (the “Pre-funding Agreement”).

The Offer Shares allocated to applicants in the Private Placement will be tradable after the announcement by the Company of the share capital increase pertaining to the Private Placement has been registered with the Norwegian Register of Business Enterprises (the “NRBE”), which is expected on or about 20 June 2024 (T+1).

Settlement is expected to take place on or about 21 June 2024 (T+2) on a DVP basis.

Conditions for Completion

Completion of the Private Placement by delivery of the Offer Shares to applicants in the Private Placement (“Applicants”) is subject to: (i) the Board resolving to proceed with the Private Placement and to allocate the Offer Shares; and (ii) the Board resolving the issuance of new shares pertaining to the Private Placement pursuant to the Board Authorisation and (iii) the registration of the share capital increase in the NRBE.

Applicants’ acquisition of Offer Shares in the Private Placement are final and binding and cannot be revoked, canceled or terminated by the respective investors.

The Company reserves the right, at any time and for any reason, to cancel, and/or modify the terms of, the Private Placement prior to notification of allocation. Neither the Company nor the Managers will be liable for any losses incurred by Applicants if the Private Placement is cancelled, irrespective of the reason for such cancellation.

Potential Subsequent Offering

Subject to, among other things, completion of the Private Placement, publication of a prospectus and prevailing market price of the Company’s shares being higher than the Offer Price as determined by the Board, and potentially also approval by an extraordinary general meeting of the Company (if required), the Board will consider whether it is appropriate to carry out a subsequent offering (the “Subsequent Offering”) at the Offer Price. Any such Subsequent Offering, if applicable, and subject to applicable securities laws, shall be directed towards existing eligible shareholders in the Company as of 18 June 2024 (as registered with the VPS two trading days thereafter) who (i) were not allocated Offer Shares in the Private Placement, and (ii) are not resident in a jurisdiction where such offering would be unlawful, or would (in jurisdictions other than Norway) require any prospectus filing, registration or similar action. The Company reserves the right in its sole discretion to not conduct or to cancel the Subsequent Offering.

An updated Company presentation will be available at the Company’s webpage

Advisors

The Company has appointed Arctic Securities AS, DNB Markets, a part of DNB Bank ASA, and Nordea Bank Abp, filial i Norge as Joint Global Coordinators and Joint Bookrunners. Advokatfirmaet BAHR AS is acting as legal advisor to the Company.

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Address:	Torget 5
City:	Elnesvågen
State/ZIP:	(NO-6440)
Country:	Norway
Phone:	+47 46 86 00 00
E-Mail:	[email protected]
Skype:	https://www.instagram.com/salmonevolution/
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