View of salmon grow-out tanks at an AquaBounty farm.
Photo: Samuel Thomas Kendall / AquaBounty.
Land-based salmon producer AquaBounty Technologies, Inc. announced that, after exploring "a wide range of financing and strategic alternatives" to strengthen its balance sheet and increase its cash position, it has decided to put its Rollo Bay farm operation up for sale.
Located on Prince Edward Island, Canada, the farm was acquired by AquaBounty in 2016 and has since been developed as a broodstock and egg production operation. Now, pressed by the immediate cash requirements, the company's investment banker is already conducting the sale process, which is expected to be completed before the end of the year.
"The Rollo Bay farm was purchased and developed to support an expansion plan for five large land-based grow-out farms. Since we will not require the egg output from the Rollo Bay farm in the near to mid-term timeframe, and since we will retain sufficient egg production capacity for our Ohio farm from our hatchery in Bay Fortune, we have determined that the Rollo Bay farm can be sold at this time to resolve the Company’s immediate cash requirements, without impacting our long-term strategy," AquaBounty's President and Chief Executive Officer, David Melbourne, explained about the sale decision.
The sale of the Rollo Bay farm comes after Wisconsin-based aquaponics company Superior Fresh acquired AquaBounty Technologies' Indiana farm earlier in July. As reported by WeAreAquaculture, the deal closed for a total of USD 9.2 million (EUR 8.4 million), net of expenses.
It is worth noting that, in its last quarterly report, the company reported a net loss of USD 50.5 million (EUR 46.2 million). That loss included a non-cash impairment charge of USD 44.5 million (EUR 40.7 million) against the long-lived assets of the Indiana farm and certain equipment of the Ohio farm, which were sold or offered for sale.
The decision to sell now a broodstock and egg production operation is striking since, according to Melbourne's own statements in the Q2 2024 results presentation, the sale of eggs to other producers is precisely one of the opportunities to preserve cash and reduce operating expenses that the salmon farmer was considering.
AquaBounty's President and Chief Executive Officer said then that the company had completed a sale of conventional Atlantic salmon eggs from the winter spawning of this operation to a large net-pen salmon farmer at the beginning of the quarter and had also secured a large follow-on order from the same customer for additional conventional eggs from its summer spawn.