Proximar is running out of money and isn't certain to find a solution
Lower than expected sales revenues and changed payment terms have led to an acute liquidity situation for the salmon farmer. The company warns that available liquidity will be exhausted by the end of October if new financing is not in place.
Proximar Seafood, which operates a land-based salmon farm in Japan, reports a challenging financial situation this morning.
According to a stock exchange announcement, the Norwegian-owned company has had lower than expected revenues in recent months. At the same time, changes in payment terms related to the sale of salmon have led to cash flow from operations being significantly weaker than planned.
Based on the company's current forecasts, the available liquidity will be exhausted by the end of October.
Proximar states that it has recently considered several options to secure additional financing, and that it is now in dialogue with its key stakeholders to find a solution.
"There is no guarantee that a solution will be found. The company will keep the market informed as the situation develops," it says.
Needs up to NOK 70 million
Together with financial advisor ABG Sundal Collier, Proximar is working to raise the necessary capital.
According to the company's own estimates, the financing requirement until the end of 2027 is between NOK 50 and 70 million (£4m-£5.6m). The final amount will depend on which agreements can be entered into with the company's most important stakeholders.
At the same time, the banks behind a syndicated loan of 8.8 billion Japanese yen, equivalent to around £42m, are working to extend the loan's maturity. The loan, which was taken out by the company's Japanese subsidiary, is scheduled to mature in November 2026.
The banks are now working to postpone the maturity until August 2027. However, such an extension requires the necessary credit approvals.
Operation as normal
The company also reports that while discussions are ongoing, operations will continue as normal, but under strict liquidity control.
"Payments are limited to costs necessary to maintain operations, ensure fish welfare and preserve the value of the biomass," the company writes.
The interest payment on the company's convertible bond loan of NOK 40 million has not been made. The company will request a payment deferral on all interest-bearing debt in the Norwegian parent company.
Expect positive EBITDA soon
Proximar's recirculating aquaculture system (RAS) facility near Mount Fuji has a designed capacity of 5,300 tonnes (head on gutted) at full capacity. The company had early production difficulties caused by filter issues, but points out that over the past 12 months its operating and biological results have steadily improved.
"With gradually increasing harvest weights and prices, this is expected to contribute to the company achieving positive operational EBITDA in the near future."
