Norway Royal Salmon (NRS) has announced its intention to file a lawsuit against its major shareholder, NTS. The independent board of directors of NRS has decided after NTS voted against the proposed share issue at the extraordinary general meeting yesterday. As a result, the share issue was not approved and therefore NRS will not be able to complete the acquisition of SalmoNor as planned. In response, the NRS board has deemed it necessary to file a lawsuit against NTS claiming damages for breach of contract.
"The share purchase agreement between NRS and NTS contains a clear and express provision requiring NTS to be represented at the general meeting with all its shares in NRS and vote in favour of the share issue. NTS has breached this obligation by voting against the share issue", stated Norway Royal Salmon in the stock exchange announcement where they communicated his intention to sue. "The SalmoNor transaction is, for NRS, a transaction with its main shareholder, and it has therefore been particularly important for the independent board to ensure that the interests of all shareholders of NRS are being protected. There have been no proposals from NTS which have protected that shareholder values in NRS", they said.
The independent board of the salmon company considers the decision taken by its largest shareholder, NTS, which owns 68 percent of the shares of Norway Royal Salmon, unacceptable, as it "will result in a significant economic loss for NRS and its shareholders". Therefore, it considers it necessary to file this lawsuit claiming damages for breach of contract.
According to the same stock exchange statement, NTS has justified its failure to comply with this voting commitment by arguing that the NTS board's freedom of action is limited by section 6-17 of the Norwegian Securities Trading Act. Norway Royal Salmon disagreed with this position and has assured that "in the share purchase agreement dated 11 January, NTS undertook a legally binding obligation to sell the shares in SalmoNor AS and vote in favour of the share issue". At that time, no offer had yet been made for NTS, and, again according to NRS, the fact that it was made after "does not prevent NTS from complying with its obligations under already existing agreements, and does not give NTS any right to withdraw from its obligations".
NTS, for its part, is continuing with its roadmap, and has already announced a new call for its ordinary general meeting on April 29, coinciding with the end of the period of voluntary acceptance of SalMar's offer for its shares. In this announcement, the 'Consent to carry out an issue of shares in Norway Royal Salmon ASA' is included in item 9 of the agenda. NRS considers this vote to be unacceptable, and assures that "it does not in any event appear realistic that the general meeting of NTS will support a share issue in NRS".
This lawsuit is the latest chapter in a story that began in mid-February when SalMar announced that it had pre-accepted the shareholder offer for approximately 50.1 % of the outstanding shares in the North Trøndelag salmon company. A transaction that, almost from the beginning, has been threatened by the various movements of NRS to purchase SalmoNor, and which now looks set to end on April 29 or, perhaps, later in court.
