Los Ángeles, Bio Bio, Chile-based salmon farmer Salmones Austral has decided to postpone its initial public offering (IPO) on the Santiago Stock Exchange due to adverse market conditions, principally brought on by the effects of COVID-19.
With the firms Larrain Vial and Credicorp Capital as financial advisers, Salmones Austral had registered with Chile’s Financial Market Commission (CMF) its intention to issue 250 million shares for a total amount of USD 47.7 million (EUR 39.3 million).
In May 2020, the salmon farmer got approval from CMF to register its shares in the securities register – the last regulatory step needed before listing on the stock exchange and launching an initial public offering. However, since then the salmon industry has been heavily impacted by the worldwide spread of COVID-19 – particularly in the hotel, restaurant, and cafe (HoReCa) channel – which resulted in a drop in export prices of nearly 35 percent, causing large financial losses in the industry, Salmones Austral said.
“Adverse conditions persist to date … Nothing that has occurred in the markets today makes it advisable, in the opinion of the company and its shareholders, to carry out the public offering of shares in 2021,” it said in a statement to the CMF.
The company is “firmly decided” to launch the IPO, but it petitioned the commission “to allow this to occur within a reasonable period of time, ideally the first half of 2022.”
The company should have no problems financing its operations for the time being. Last year, Salmones Austral reached an agreement with three banks – Norwegian bank DNB, Rabobank, and local bank Banco BCI – for a USD 40 million (EUR 35.5 million) loan to continue its USD 100 million (EUR 88.2 million) investment plan for the next three years.
Salmones Austral was created in 2013 after the merger of Trusal and Pacific Star. Today, it has annual production of some 45,000 to 50,000 metric tons of salmon, exported to more than 20 countries, with more than 1,400 workers operating in two process plants and 20 freshwater and seawater farming centers in the regions of Maule, Biobío, La Araucanía, Los Lagos, and Aysén.
