Atlantic Sapphire has had its request for reapproval of a USD 250 million (EUR 230 million) bond approved by local officials in the U.S. state of Florida.
The bond, which had been approved in 2023 but expired in April 2024, was reapproved by the Miami-Dade Board of County Commissioners at its 7 May meeting. The commissioners’ resolution, which passed 13-0, authorizes the Miami-Dade County Industrial Development Authority to issue one or more exempt facility bonds or taxable bonds within the next year. Neither the Miami-Dade County Industrial Development Authority nor the county will have liability for repayment of the bonds, and Wells Fargo, the bond underwriter, said it expects the bonds to be issued sometime this year.
Atlantic Sapphire said it also plans to provide a USD 100 million (EUR 92 million) equity contribution in its push to complete Phase 2 of its land-based recirculating aquaculture system (RAS) Atlantic salmon farm in the city of Miami. The project will include the construction of wastewater treatment and disposal facilities, site improvements, building construction, equipment, and the drilling of additional wells, according to the bond proposal.
Upon completion, targeted for 2026 with ramped-up production commencing in 2027, the company expects to reach an annual capacity of 25,000 metric tons (MT) of salmon. Phase 2 construction has already begun and is being led by project engineer Hazen and Sawyer and construction firm Wharton Smith Inc.
The company said Phase 1 of the project has been completed at a cost of around USD 225 million (EUR 207 million) and will have 9,500 MT of annual production capacity once it passes final inspections and receives its final permits, which is expected in coming months. Atlantic Sapphire completed its first commercial harvest from its Miami RAS in September 2020.
Atlantic Sapphire celebrated another milestone on 14 May with the appointment of Pedro Courard as its next CEO. Previously managing director of Cermaq Chile, he also has served as managing director of Ocean Chile (now Scale) and as farming director at Multi X. Courard has been granted an option package of 1.4 million shares with a four-year vesting period, subject to company board approval at its 23 May meeting.
“Our management team is complete, and I believe it is the most experienced in the land-based salmon-farming industry,” Atlantic Sapphire Chair Kenneth J. Andersen said in a press release. “Pedro's expertise and leadership will be crucial on our path toward operational excellence and profitability in our current operations, as well as laying the ground for further growth investments."
Atlantic Sapphire Founder Johan Andreassen, who stepped into an interim role in October 2023 after serving as CEO since 2016, will remain interim CEO until Courard relocates to Florida.
“I am very pleased that after a long and thorough process, Pedro Courard has been selected as my successor,” Andreassen said. “Pedro has a strong operational track record within the Chilean salmon industry, and I am convinced that he will be a good match to lead the Miami operations and take the company to operational excellence in Phase 1 and beyond. The strategic position of Atlantic Sapphire is stronger today than ever, being the sole land-based salmon producer at scale in the vast and growing U.S. market with a unique location that enables the company to grow its production to unmatched scale, sustainably.”
Courard described the task of building up Atlantic Sapphire as “a great personal and professional challenge.”
“I am extremely excited, and I feel honored to have been selected to lead the next steps of the largest land-based production project in the world, with all the opportunities and challenges it involves for me on a personal level,” he said. “I’m convinced that land-based salmon farming has the potential to disrupt the aquaculture industry and solve many of the challenges that global protein production faces today.”
Atlantic Sapphire has faced a tumultuous few years as it works to build what it eventually hopes will become the largest land-based salmon farm in the world, with a planned production volume of 220,000 MT of salmon by 2031.
The company faced setbacks during the construction of Phase 1 of its facility in 2020, and its farm in Denmark was hit by a mortality event and then burned to the ground in 2021. The company described 2022 as a “challenging” year in its FY 2022 results, and in August 2023, it said it would likely breach financial covenants based on its projected revenue and cash flow in H2 2023.
In its FY 2023 results, released 18 April, Atlantic Sapphire posted a net loss of USD 133.8 million (EUR 123 million), up from a loss of USD 65 million (EUR 59.7 million) in 2022. Its revenue declined to USD 14 million (EUR 12.9 million) from USD 19 million (EUR 17.5 million) in 2022, which it blamed on temperature-related challenges that have resulted in the company undershooting its biomass targets. It reported it produced 1,545 MT of head-on, gutted salmon in 2023, down 31 percent from 2022.
“Fish from these systems have since been harvested at lower average weights and with a higher share of downgrades than originally planned,” the company said in a statement. “The fish from the lead batches are expected to be harvested out by May 2024, which means that the farm will be fully stocked with fish that are performing significantly better.”
Atlantic Sapphire said it is seeing “continuous positive operational improvements on the operational side” that “sets the stage for improved biological and financial performance in 2024, with better operational stability and water quality going into 2024 than the group has ever seen.”
“Since October 2023, the Group has seen strong biological KPIs on the younger batches of fish, including low feed conversion rates and good appetite, while mortality rates have been consistently low. The group expects to continue to see good performance with stable conditions across the facility,” it said.
The Phase 2 expansion will be key for the company to “achieve the economies of scale that are necessary to return an attractive long-term return on investment for our shareholders,” it said.
Since August 2022, Atlantic Sapphire has raised more than NOK 1.5 billion (USD 140 million, EUR 129 million) in private placements and new share offerings. It is planning a 10-to-1 reverse share split that will come into effect 30 May, with its current stock price on the Euronext Oslo Stock Exchange valued at NOK 1.11 (USD 0.10, EUR 0.09) as of 16 May.
