Atlantic Sapphire CFO departs as company considers USD 100 million private placement

Norwegian land-based aquaculture firm Atlantic Sapphire announced Wednesday, 9 Septpember its chief financial officer, Jose Prado, left his position sometime within the past month, soon after the company’s second-quarter results were released. The results publicized significant cost overruns at its recirculating aquaculture system farm under construction outside of Miami, Florida, U.S.A.

The announcement came with news that the company is considering a USD 100 million (EUR 84.6 million) private placement. Those funds would be used to pay off existing debt and fund expansion efforts, and represents 12 percent of the company's outstanding capital at current share price levels.

The company is currently looking at opportunities to finance its long-term debt for the second phase of construction of its Miami facility, including replacing the short-term debt of USD 30 million (EUR 25 million) before December either through loans, bond loans, or other types of debt or equity transactions. According to reports, investments in the Miami-Dade County facility bumped up around USD 3.00 (EUR 2.50) per kilo to around USD 22 (EUR 18.35) per kilo.

Construction on the facility is far behind schedule – originally the company was set to begin commercial harvest in April, then the third quarter of 2020, and now just the largest fish will be harvested in September.

The company also faced costs linked to an emergency harvest of close to 200,000 fish, with a total weight of approximately 400 tons in July due to disruptive construction and the weakness of the fish caused by the challenges of delayed construction and commissioning, due in part to the COVID-19 pandemic. Only 150 tons of those fish were sent for processing to be sold.

Atlantic Sapphire CEO Karl-Oystein Oyehaug will take over Prado's CFO duties while the group recruits a replacement.

The private placement directed towards Norwegian and international investors opens today and runs through 10 September. The company could extend or cut the book building period short as well.

According to reports, several Atlantic Sapphire employees have pre-committed to subscribe for shares in the private placement: Atlantic Sapphire CEO and Chairman Johan Andreassen committed shares worth USD 2.7 million (EUR 2.2 million) through investment group Alsco; Co-Founder and Chief Technology Officer Thue Holm committed 25,000 shares; board members Alexanders Reus and Tone Bjornov committed 100,000 and 2,000 shares, respectively; and board member and largest shareholder Runar Vatne committed shares worth USD 5.7 million (EUR 4.8 million) through Vatne Equity.

Atlantic Sapphire plans to announce the exact number of offer shares to be issued through the private placement in a stock exchange announcement on 10 September.