Grieg ready to max out its green credit card

The Norwegian salmon farmer announced in June that it had raised NOK 1 billion by issuing a five-year green bond in a transaction that was significantly oversubscribed.

Today the company said it was contemplating a “tap issue” of up to NOK 500m under the existing bond, subject to market conditions. The issue would take Grieg up to its green bond borrowing limit of NOK 1.5bn.

Environmental benefits

The senior unsecured green bond issued in June pays interest at the three-month average for the NIBOR (Norwegian Interbank Offered Rate) plus 340 basis points.

Green bonds enable capital-raising and investment for new and existing projects with environmental benefits.

Companies raising money with green bonds are expected to comply with the voluntary Green Bond Principles published in June 2018 by the International Capital Market Association (ICMA). 

Leaving Scotland

Grieg has found itself short of cash for investment after earnings were dented by low salmon spot prices caused by the Covid-19 pandemic and losses were incurred by Grieg Seafood Shetland, which lost 1,500 tonnes of fish at its farms on Skye in the summer due to abnormal levels of jellyfish.

In its third-quarter report published earlier this month Grieg said that it planned to sell its Scottish operation and concentrate its efforts on Norway and in Canada, where it has farms in British Columbia and is developing new sites in Placentia Bay, Newfoundland.  

Grieg Seafood made a Q3 operating loss of NOK 192m, largely as a result of losses from Scotland.