"Chile is an open market that can be accessed directly, and we will maintain our presence and relevance in the financial community," said Ricardo García Holtz, Vice President of Salmones Camanchaca, in announcing the company's exit from the Oslo Stock Exchange.
Photo: Salmones Camanchaca.
Salmones Camanchaca Board of Directors announced the start of the necessary processes "to discontinue certificates of deposit for its tradable shares on the Oslo Stock Exchange," that is to exit Euronext Oslo. The company, which clarified that it maintains the possibility of trading its shares on the Santiago Stock Exchange, in Chile, seeks to complete the operation within 2024 and has been very clear about the reason for this change that will lead it to be listed only in Chile.
In January 2018, Salmones Camanchaca decided to place 30% of its shares on the market, allocating shareholders in Oslo 25% ownership and those in Santiago the remaining 5%. However, during the past six and a half years, the Norwegian certificates - called NDRs - have been mostly sold by investors in Oslo and acquired by investors in Chile, massively reducing the NDRs and increasing the shares that do trade on the Santiago Stock Exchange. Thus, what started as 25% and 5% has now become approximately 2.9% and 26.8%.
This lack of presence of Salmones Camanchaca's shares in Euronext Oslo's operations has meant that the dual listing has lost its original purpose which, as the Chilean salmon farming company explained, was to be present on the world's main stock exchange for seafood companies. The current minimal presence and profit make the costs of keeping shares listed on two markets unjustified, though.
"Salmones Camanchaca made an important effort in 2018 to offer 30% of its shares in two markets, Chilean and Norwegian, as that would open doors for ample financing and access to more developed capital markets, especially in the seafood sector. However, our shares became less attractive in Norway as investors in Chile bought shares in Santiago, and thus that market reduced its liquidity," explained Ricardo García Holtz, Vice President of Salmones Camanchaca.
"We realized over the years that a dual placement makes a lot of sense when the two markets are interconnected, and property can flow freely from one to the other, with low transaction costs and quickly. Reality showed that the processes were very smooth when it came to bringing property or shares into Chile, but very difficult in the reverse transaction," he added.
"Thus, without two-way arbitrage, dual placements do not work. With less than 3% of the property traded in Oslo, and no possibility in practice of flows carrying shares from Chile to Norway, the costs of keeping the shares listed in two markets were totally unjustified," continued García Holtz's explanation.
Salmones Camanchaca's Vice President also said that ending the Oslo Stock Exchange will bring effective savings to the company, which estimates that it will also achieve it without associated costs. "Chile is an open market that can be accessed directly, and we will maintain our presence and relevance in the financial community," he concluded.