Proximar offered £55m loan to finance on-land salmon farm
Norwegian company given favourable terms by Japanese banks
Proximar Seafood, which is building an on-land salmon farm in Japan, has received a debt financing offer of 8.8 billion yen (£55 million / NOK 680m) from a syndicate of two Japanese banks, it announced today.
“We are delighted to finally see the entire debt financing now coming in place for our stage 1 facility,” said Joachim Nielsen, chief executive of the Norwegian-owned fish farmer.
“Proximar has evaluated multiple debt financing alternatives over the last two years and the offer represents the company’s preferred option for debt financing in line with our targeted debt ratio. To obtain a complete debt solution for both the construction and operating phases at attractive terms, marks a breakthrough for the company.”
Due diligence
Proximar said the loan offer consists of a Highly Confident Letter along with a term sheet. It explained that a Highly Confident Letter is typically issued in Japan after a substantial part of the due diligence is completed and at the time when the execution risk is assumed minimal. The loan offer implies that Proximar will reach its ambition of around 45% debt ratio.
The company said the loan is considered to be offered at attractive terms with an interest rate below 5% and addresses both the remaining construction financing as well as operational financing.
The offer is subject to customary conditions such as final credit committee approval, legal due diligence, and completion of loan documentation. Disbursement of the first part of the loan is scheduled for March 2023 and the second during summer 2023, at the time when Proximar takes over the post-smolt grow-out building from contractors.
Three batches
The company said its first batch from eggs inserted into the facility in October, is thriving in the first feeding department. Currently three batches are in production and performing well and in accordance with expectations. Going forward, Proximar expects new batches to arrive monthly, enabling continuous harvest from medio 2024.
Construction work of the post-smolt grow-out building is progressing as scheduled. Installation of tanks and recirculating aquaculture system equipment is ongoing, and the entire facility – situated around an hour’s drive from Tokyo - is expected to be finished in the third quarter of 2023.
