'Soft market' forces Salmon Evolution to borrow more money
Leading land-based player takes action to secure liquidity
Salmon Evolution has entered into a credit framework agreement of up to NOK 250 million (£18.4m) with the DNB and Nordea banks, the leading land-based salmon farmer has announced.
According to the announcement, the new loan facility is based on normal market terms and has a term of 12 months, with the possibility of extension for an additional six months, subject to the lenders' consent.
The loan facility has received necessary approvals from the banks' credit committees and is subject to customary closing conditions, including final documentation.
In addition, Norway-based Salmon Evolution has entered into an agreement to increase its current overdraft facility with Nordea from NOK 150m to NOK 200m.
Strengthening financial flexibility
"The purpose of the new facility is to strengthen the Company's financial flexibility in light of a softer than expected salmon market over the last 12 months," Salmon Evolution stated.
"A portion of the new facility is dedicated to the planned pre-grow-out department at (Salmon Evolution's location) Indre Harøy. As reported in the Q1 2025 presentation the Indre Harøy phase 2 construction project is progressing according to plan."
Change of loan terms
Under the company's existing loan facilities, it is subject to various financial covenants.
"As a result of the weaker salmon market, the company has agreed with its lenders to change its EBITDA requirements through 2025," it adds.
