AKVA nets US land-based salmon farm contract, will take equity in project

Published on
June 15, 2020

Aquaculture services and equipment provider AKVA Group ASA has signed a non-binding term sheet with the Norwegian company AquaCon AS to design and supply equipment and engineering for a new land-based salmon farm in the United States.

The final contract, if awarded, is expected to have a minimum value of USD 130 million (EUR 115.5 million). The project and AKVA's deliveries are expected to be completed by 2023. The term sheet is expected to remain effective until 31 December, 2020. 

AquaCon’s new grow-out facility, located on the eastern shore of the U.S. state of Maryland, is expected to have the production capacity of 15,000 metric tons (MT) of head-on-gutted fish.

AKVA will participate with EUR 3 million (USD 3.4 million) in equity in the project if sufficient further financing is achieved and will also provide a convertible loan in the amount of EUR 500,000 (USD 562,880) as bridge financing until the financing of the project has been completed.

Its participation in the project is subject to AquaCon obtaining the necessary financing for the project and agreement on a final contract.

As previously reported, AKVA received orders totaling NOK 709 million (USD 72.9 million, EUR 64.8 million) in the first quarter of this year, down from a record NOK 1.1 billion (USD 113.1 million, EUR 100.5 million) in Q1 2019, attributing some of the decline to its Land Based Technology (LBT) business segment making a slow start to the year.

According to the Norwegian group’s report for Q1 2020, on a trailing 12-month basis, the group’s order intake stood at NOK 1.65 billion (USD 170 million, EUR 150.8 million), including LBT projects totaling NOK 605 million (USD 62.3 million, EUR 55.3 million). The quarter ended with revenues of NOK 752 million (USD 77.4 million, EUR 68.7 million), down from NOK 852 million (USD 87.7 million, EUR 77.9 million) at the end of Q1 2019.

Last month, AKVA entered into agreements to acquire land-based aquaculture equipment supplier Austevoll Rørteknikk and also all of the remaining shares in remotely operated vehicle (ROV) company Sperre. Both of these firms are based in Norway. 

Contributing Editor reporting from London, UK

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