Kingfish Company raises €32m to complete expansion of Netherlands RAS
Convertible loan proceeds will also fund land-based farmer’s path to profitability
Netherlands Seriola farmer The Kingfish Company has raised €32 million (£27.4m) to complete Phase 2 of its recirculating aquaculture system (RAS) in Zeeland and fund the company’s operations until it reaches sustainable profitability.
The capital comes from an unsecured convertible loan paying interest of 15% per annum. A convertible loan enables lenders to convert the debt into shares in the borrower's business.
The Kingfish Company produces yellowtail kingfish (Seriola lalandi), marketed under its Dutch Yellowtail brand. It said it had experienced significant support and interest from both existing shareholders and new investors to participate in the loan. The majority of the loan is allocated to existing key shareholders, while €11m will be allocated to the sustainability-focused Ocean 14 Capital Fund.
The company said the Ocean 14 team has over 25 years of aquaculture industry experience including significant experience with RAS technology, further complementing the company's list of reputable investors.
Sustainable profitability
"The successful placement of the convertible loan will secure the completion of Phase 2,” said Kingfish Company chief executive Vincent Erenst.
“We are in the process of more than doubling our production capacity (from 1,500 tonnes to 3,500 tonnes) to meet the increasing demand for Dutch Yellowtail. The proceeds from the convertible loan will provide full funding for the expansion until we reach positive cash flow from operations and sustainable profitability.
“Production in the first of two grow-out systems in Phase 2 began in May 2023. The new facility has been running very well since the start and we are proud to have increased biomass by more than 100 tons in just over one month. This is a testament to the advanced design and the skills of our team.”
According to the Kingfish Company’s revised project plan and timeline, the harvest volume from the farm in Zeeland will start to increase in the first quarter of 2024. Steady state production is expected in the course of 2025. Estimated capex for Phase 2 remains unchanged at €95m.
€4.8m operating loss
In its annual report for 2022, the company said annual revenue increased by 81% from €10.4m in 2021 to €18.7m. Gross profit per kg sold was €3.35 in 2022, up from €2.25 per kg the year before, but the company still made an operating loss of €4.8m, lower than €5.5m operating loss made in 2021.
The company made a net loss after tax in 2022 of €7.313m, which included indirect costs and reflected development costs related to the scale-up phase of the business, and planned expansion of the company’s production capacity in the Netherlands and the United States.
The company’s US subsidiary, Kingfish Maine, has permission to build an 8,500-tonne RAS facility at Jonesport, Maine, although work has not yet started. Kingfish Maine is waiting for the result of an appeal against permission for the RAS before beginning work on the site.
Ocean 14 Capital takes its name from United Nations Sustainable Development Goal (UN SDG) 14, “Life below water”, and seeks financial returns from investments that also contribute to improved ocean health. Its capital impact investment fund was launched in December 2021.
Last year it invested €10m in Tilabras, a Brazilian tilapia farmer that feeds its fish a vegetarian diet, and also put money into shrimp breeding technology specialist SyAqua, along with AION, a Norwegian plastic management platform that uses proprietary technology to offer ‘Circularity As A Service’ to large-scale industries, and MITO, an Italian clam hatchery and breeding company.
