Proximar Seafood announced its third quarter results today, revealing that it needs to find an additional NOK 165 million in funding to cover rising costs as it continues constructing its land-based salmon farm in Japan.
The company, based in Norway, is currently building its first phase, targeting an initial production of 5,300 tonnes per year. Proximar is currently preparing to transfer the first fish to its new grow-out building in Q4, CEO Joachim Nielsen said. However, the project's Capex has increased to NOK 1.2 billion during the quarter.
“This is an increase of 17% from the start of construction two and a half years ago (excluding currency effects)," Nielsen said.
"Increases in operating cost drivers, financing and capex require the company to raise additional funds, a total of NOK 165 million."
Proximar previously raised 8.8 billion Yen earlier in the year, by securing a "blue sustainability" loan from Japanese banking entities.
Nielsen indicated that the company has a number of options on the table for the new capital raise.
“Proximar is evaluating several options for how to fund the additional capital need, seeking an optimal capital structure including debt, both in Norway and Japan throughout the coming months," he said.
"The company will seek a solution together with the largest shareholders and has indications of several alternatives covering the majority of the capital need."
Despite this, the CEO said the company is still on track for its planned first harvest in the third quarter of 2024, with the fish "growing steadily".
The company had seven batches of fish in production at the end of the quarter, showing "strong growth curves ahead of expectations". The performance of the system is stable, and mortality is low.
“We are running the very first commercial Atlantic salmon farming facility built in Japan, and with that comes several challenges, among them also some cost increases that necessitate additional funding," Nielsen said.
“We are excited to take another important step towards our first harvest, with our Atlantic salmon increasing in size. The biological growth is ahead of expectations, and we are on schedule for the transfer of fish to the important next phase in the grow-out building," Nielsen said.
The company said it planned to further develop its "Japanese foothold" in terms of investors and strategic partners, planning to engage with a Japanese investment bank as an advisor. Proximar is also investigating a possible listing or dual listing in Japan on the Tokyo Stock Exchange.
