Japan on-land salmon farmer offered £25m loan

Proximar Seafood AS, which is building an on-land salmon farm in Japan, has been offered a post-construction loan of 4 billion yen (£25 million) from a Japanese bank.

The Norwegian company said the loan is intended to finance its facility and production of 5,300 gutted weight tonnes of salmon annually at Oyama, situated at the foot of Mount Fuji and about an hour’s drive from Tokyo.

The loan is subject to syndication - the process of involving a group of lenders that fund various portions of a loan for a single borrower – and certain conditions.

Proximar said there is already positive interest from other banks and financial institutions.

Key priority

“Securing debt financing is a key priority for Proximar,” said chief executive Joachim Nielsen in an update on the company’s website.

“In October, we successfully initiated the production phase at our facility in Japan, and this loan offer demonstrates the robustness in our business model. It also shows that we are able to attract credit providers in the funding of Proximar’s activities going forward.”

Proximar said its dialogues on remaining construction loan financing have to a large extent been pending visibility on post-construction debt financing.

“This offer is a steppingstone in our post-construction financing plan. With the received offer, construction loan discussions are now also expected to progress more efficiently,” said Nielsen.

Ongoing discussions with banks and financial institutions cover alternatives for further construction financing as well as post-construction funding, said the company.

On budget

Proximar has previously secured an outstanding loan from JA Mitsui Leasing of Yen 3.25 billion, which is required to be refinanced in March 2024. The company said that based on the ongoing dialogues with banks and financial institutions, it is optimistic on concluding on a debt structure aligned with the previous guidance of approximately 45% debt level (~NOK 630 m / £51.7 m), based on the total project cost. Proximar will evaluate the received offer and the alternatives and provide further update.

More than 80% of civil engineering works for the on-land farm have been completed, said Proximar, and construction costs are on budget.

“Currently the installation of production tanks is ongoing in the grow-out building. Production is running according to our plans, and the second batch of eggs was inserted in December,” the company stated.

“The first batch inserted late October has successfully hatched and will in a short while be brought into the first feeding department which was commissioned in December.”