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Salmon Evolution ASA: Contemplated Private Placement

18 April 2023: Salmon Evolution ASA (”Salmon Evolution” or the “Company”) announces that it has engaged DNB Markets, a part of DNB Bank ASA, and Nordea Bank Abp. filial i Norge as Joint Global Coordinators and Joint Bookrunners, and Arctic Securities AS and Pareto Securities AS as Joint Bookrunners (together the “Managers”) to advise on and effect a contemplated private placement (the “Private Placement”) of new ordinary shares in the Company (the “Offer Shares”), raising gross proceeds of approximately NOK 500 million (“Offer Size”). The price per Offer Share in the Private Placement (“Offer Price”) will be set by the Company’s board of directors (the “Board”) on the basis of an accelerated book-building process conducted by the Managers.

Certain existing shareholders, including amongst others Ronja Capital II AS, Farvatn Private Equity AS and Kjølås Stansekniver AS, have pre-committed to apply for Offer Shares for in total approx. NOK 80 million.

In addition, the following primary insiders have indicated to apply for Offer Shares as follows:

Based on limited wallcrossing exercise prior to launch, the Managers have received indications of interest to subscribe for Offer Shares so that the Private Placement is covered at the start of the application period.

The net proceeds from the Private Placement are intended to be used: (i) to fund the currently estimated equity portion of Phase 2 of the salmon farming facility at Indre Harøy and (ii) for general corporate purposes. If the extraordinary general meeting expected to be held on or about 11 May 2023 (the “EGM”) does not approve the issuance of the new shares pertaining to Tranche 2 (as defined below), the proceeds from the sale of Offer Shares in Tranche 2 will be for the benefit of the share lender Ronja Capital II AS under the Share Loan (as defined below), and not for the benefit of the Company, and the Company will not receive any proceeds from Tranche 2 in such circumstance.

The application period in the Private Placement will commence today, 18 April 2023 at 16:30 CEST and close on 19 April 2023 at 08:00 CEST. The Managers and the Company may, however, at any time resolve to close or extend the application period on short or without notice. If the application period is shortened or extended, any other dates referred to herein may be amended accordingly.

The Private Placement will be directed towards selected Norwegian and international investors (a) outside the United States in reliance on Regulation S under the U.S. Securities Act and (b) to investors in the United States who are QIBs as defined in Rule 144A under the U.S. Securities Act, in each case subject to an exemption being available from offer prospectus requirements and any other filing or registration requirements in the applicable jurisdictions and subject to other selling restrictions. The minimum application and allocation amount has been set to the NOK equivalent of EUR 100,000 per investor. The Company may, however, at its sole discretion, allocate an amount below EUR 100,000 to the extent applicable exemptions from the prospectus requirement pursuant to the Norwegian Securities Trading Act and ancillary regulations are available. Further selling restrictions and transaction terms will apply.

Allocation of Offer Shares will be determined at the end of the application period by the Board at its sole discretion based on allocation criteria such as (but not limited to) existing ownership, pre-commitments, price leadership, timeliness of order, relative order size, perceived investor quality, sector knowledge and investment horizon. The Board reserves the right at its sole discretion, to reject and/or reduce any orders, in whole or in part. The Board and the Managers further reserve the right, at their sole discretion, to take into account the creditworthiness of any applicant. There is no guarantee that any potential investor will be allocated shares.

Settlement and Dates

The Offer Shares will be allocated in two tranches as follows: one tranche with 51,863,220 Offer Shares (“Tranche 1”) and a second tranche with a number of Offer Shares which results in a total transaction (i.e. both tranches) equal to the final Offer Size (“Tranche 2”).

Tranche 1 is expected to be settled with new shares in the Company to be issued under the existing Board authorization to issue shares (the “Board Authorization”) granted by the Company’s annual general meeting held on 14 June 2022, and delivery versus payment (DVP) settlement is expected to be facilitated by a pre-funding agreement between the Company and the Managers (the “Pre-funding Agreement”).

Tranche 2 is expected to be settled with existing and unencumbered shares in the Company, that are already listed on Oslo Børs, pursuant to a share lending agreement (the “Share Loan”) between the Company, DNB Markets, a part of DNB Bank ASA (on behalf of the Managers), and Ronja Capital II AS as share lender.

The Offer Shares allocated to applicants in both Tranche 1 and Tranche 2 will be tradable after the announcement of the share capital increase pertaining to Tranche 1 has been registered with the Norwegian Register of Business Enterprises (the “NRBE”), which is expected on or about 20 April 2023 (T+1).

Applicants in the Private Placement (“Applicants”) will receive a pro-rata portion of Offer Shares in Tranche 1 and Tranche 2 based on their overall allocation in the Private Placement.

Settlement is expected to take place on or about 21 April 2023 (T+2) on a delivery versus payment basis.

The Share Loan will be settled with either: (i) new shares in the Company to be issued following, and subject to, approval of Tranche 2 by the EGM; or (ii) cash to Ronja Capital II AS under the Share Loan (equal to the Offer Shares allocated in Tranche 2 multiplied with the Offer Price) if the EGM does not approve Tranche 2. Tranche 2 may thus end up being a sale of existing shares by Ronja Capital II AS if the EGM does not approve Tranche 2. Consequently, if the EGM does not approve Tranche 2, the proceeds from the sale of Offer Shares in Tranche 2 will be for the benefit of Ronja Capital II AS, and the Company will not receive any proceeds from Tranche 2 in such scenario.

Conditions for Completion

Completion of Tranche 1 and Tranche 2 by delivery of the Offer Shares to Applicants is subject to: (i) the Board resolving to proceed with the Private Placement and to allocate the Offer Shares; (ii) the Board resolving the issuance of new shares pertaining to Tranche 1 pursuant to the Board Authorisation and the registration of the share capital increase pertaining to Tranche 1 in the Norwegian Register of Business Enterprises (the “NRBE”); and (iii) the Board resolving to call for the EGM to (among others) propose to resolve the issuance of the new shares pertaining to Tranche 2.

The issue of new shares in Tranche 2 is conditional upon the EGM approving Tranche 2 and the share capital increase pertaining to Tranche 2 being registered with the NRBE.

Completion of Tranche 1 and Tranche 2 by delivery of Offer Shares to Applicants is not conditional upon the EGM’s approval of Tranche 2. Applicants’ acquisition of Offer Shares in Tranche 1 and Tranche 2 will remain final and binding and cannot be revoked, canceled or terminated by the respective investors if, for whatever reason, the EGM does not approve the issue of new shares in Tranche 2.

By applying for Offer Shares in the Private Placement, the Applicants allocated Offer Shares in the Private Placement will undertake to vote in favour of the approval of Tranche 2, and if applicable the Subsequent Offering (as defined below), at the EGM. Such undertakings apply to all shares in the Company held or controlled by such Applicants at the date of the EGM.

The Company reserves the right, at any time and for any reason, to cancel, and/or modify the terms of, the Private Placement prior to notification of allocation. Neither the Company nor the Managers will be liable for any losses incurred by applicants if the Private Placement is cancelled, irrespective of the reason for such cancellation.

Potential Subsequent Offering

Subject to, inter alia, completion of the Private Placement, approval by the EGM, approval and publication of a prospectus and prevailing market price of the Company’s shares being higher than the Offer Price as determined by the Board, the Board will consider whether it is appropriate to carry out a subsequent offering (the “Subsequent Offering”) at the Offer Price. Any such Subsequent Offering, if applicable, and subject to applicable securities laws, shall be directed towards existing shareholders in the Company as of 18 April 2023 (as registered with the VPS two trading days thereafter) who (i) were not allocated Offer Shares in the Private Placement, and (ii) are not resident in a jurisdiction where such offering would be unlawful, or would (in jurisdictions other than Norway) require any prospectus filing, registration or similar action. The Company reserves the right in its sole discretion to not conduct or to cancel the Subsequent Offering.

An updated Company presentation will be available at the Company’s webpage: www.salmonevolution.no.

Advisors

The Company has appointed DNB Markets, a part of DNB Bank ASA, and Nordea Bank Abp. filial i Norge as Joint Global Coordinators and Joint Bookrunners, and Arctic Securities AS and Pareto Securities AS as Joint Bookrunners. Advokatfirmaet BAHR AS is acting as legal advisor to the Company.

 

For more information, please contact:

Trond Håkon Schaug-Pettersen, CEO: +47 911 91 327

 

About Salmon Evolution

Salmon Evolution is a Norwegian land-based salmon farming company targeting a production capacity of 100,000 tonnes HOG by 2032. The Company’s core focus is on extending the ocean’s potential by transferring the best preconditions offered by the sea to farm fish on land through its chosen hybrid flow-through system technology (HFS). This secures a truly sustainable production process with controlled and optimal growth conditions and limiting operational and biological risk.

The Company’s first production facility is strategically located at Indre Harøy on the Norwegian west coast with unlimited access to fresh seawater, renewable energy, established infrastructure, and an educated and experienced work force. Phase 1 is already in operation and will have an annual capacity of 7,900 tonnes HOG at steady state. Fully developed, the Indre Harøy facility will have an

annual capacity of 31,500 tonnes HOG.

The Company has also entered into a joint venture with Dongwon Industries where the parties will develop, construct and operate a land-based salmon farming facility in South Korea with an annual production capacity of 16,800 tonnes HOG, using Salmon Evolution’s chosen HFS technology.

Furthermore, Salmon Evolution has initiated a process with the aim of establishing a land-based salmon farming operation in North America.

Salmon Evolution ASA is listed on Oslo Børs under the ticker SALME.

To learn more, please visit www.salmonevolution.no

IMPORTANT NOTICE

The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy, fairness or completeness. None of the Managers or any of their respective affiliates or any of their respective directors, officers, employees, advisors or agents accepts any responsibility or liability whatsoever for, or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available, or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith. This announcement has been prepared by and is the sole responsibility of the Company.

Neither this announcement nor the information contained herein is for publication, distribution or release, in whole or in part, directly or indirectly, in or into or from the United States (including its territories and possessions, any State of the United States and the District of Columbia), Australia, Canada, Japan, Hong Kong, South Africa or any other jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction. The publication, distribution or release of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

This announcement does not contain or constitute an offer to sell or a solicitation of any offer to buy or subscribe for any securities referred to in this announcement to any person in any jurisdiction, including the United States, Australia, Canada, Japan, Hong Kong or South Africa or any jurisdiction to whom or in which such offer or solicitation is unlawful.

The securities referred to in this announcement have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”), and may not be offered or sold in the United States absent registration or an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and in accordance with applicable U.S. state securities laws. The Company do not intend to register any securities referred to herein in the United States or to conduct a public offering of securities in the United States.

Any offering of the securities referred to in this announcement will be made by means of a set of subscription materials provided to potential investors. Investors should not subscribe for any securities referred to in this announcement except on the basis of information contained in the aforementioned subscription material.

In any EEA Member State, this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the EU Prospectus Regulation, i.e., only to investors who can receive the offer without an approved prospectus in such EEA Member State. The expression “EU Prospectus Regulation” means Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 (together with any applicable implementing measures in any Member State).

This communication is only being distributed to and is only directed at persons in the United Kingdom that are Qualified Investors and that are (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”) or (ii) high net worth entities, and other persons to whom this announcement may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “relevant persons”). This communication must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only to relevant persons and will be engaged in only with relevant persons. Persons distributing this communication must satisfy themselves that it is lawful to do so.

This announcement is made by, and is the responsibility of, the Company. The Managers and their affiliates are acting exclusively for the Company and no-one else in connection with the Private Placement. They will not regard any other person as their respective clients in relation to the Private Placement and will not be responsible to anyone other than the Company, for providing the protections afforded to their respective clients, nor for providing advice in relation to the Private Placement, the contents of this announcement or any transaction, arrangement or other matter referred to herein.

In connection with the Private Placement, the Managers and any of their affiliates, acting as investors for their own accounts, may subscribe for or purchase shares and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for their own accounts in such shares and other securities of the Company or related investments in connection with the Private Placement or otherwise. Accordingly, references in any subscription materials to the shares being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition, placing or dealing by, such Managers and any of their affiliates acting as investors for their own accounts. The Managers do not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

Matters discussed in this announcement may constitute forward-looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as “believe”, “aims”, “expect”, “anticipate”, “intends”, “estimate”, “will”, “may”, “continue”, “should” and similar expressions. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies, and other important factors which are difficult or impossible to predict and are beyond its control. Such risks, uncertainties, contingencies, and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. Forward-looking statements speak only as of the date they are made and cannot be relied upon as a guide to future performance. The Company, each of the Managers and their respective affiliates expressly disclaims any obligation or undertaking to update, review or revise any forward-looking statement contained in this announcement whether as a result of new information, future developments or otherwise. The information, opinions and forward-looking statements contained in this announcement speak only as at its date and are subject to change without notice.

This announcement is for information purposes only. It does not purport to be complete, and it is not to be relied upon in substitution for the exercise of independent judgment. It is not intended as investment advice and under no circumstances is it to be used or considered as an offer to sell, or a solicitation of an offer to buy any securities or a recommendation to buy or sell any securities of the Company. Neither the Managers nor any of their respective affiliates accepts any liability arising from the use of this announcement. The Company and the Managers, and their respective affiliates, expressly disclaims any obligation or undertaking to update, review or revise any statement contained in this announcement whether as a result of new information, future developments or otherwise.

The distribution of this announcement and other information may be restricted by law in certain jurisdictions. Persons into whose possession this announcement or such other information should come are required to inform themselves about and to observe any such restrictions.

This information is considered to be inside information pursuant to the EU Market Abuse Regulation, and is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act.

This stock exchange announcement was published by Hans Petter Mortveit, Finance Manager in Salmon Evolution ASA on 18 April 2023 at 16:30 (Oslo time).