Andfjord Salmon - Contemplated private placement and business update

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Andfjord Salmon Group AS ("Andfjord Salmon" or the "Company") has engaged ABG Sundal Collier ASA, Arctic Securities AS and SpareBank 1 Markets AS (the "Managers") as joint bookrunners in connection with a private placement (the "Private Placement") of new shares in the Company (the "Offer Shares") to raise gross proceeds of between NOK 600 million and NOK 650 million. The price per Offer Share in the Private Placement and the final number of Offer Shares to be issued will be determined by the Company's board of directors (the "Board"), in consultation with the Managers, on the basis of an accelerated bookbuilding process.

The net proceeds from the Private Placement will be used for advancement of the Company’s Phase 2 construction at Kvalnes, optimization of fish logistics for improved production output, preparations for adherence to expected regulatory changes, as well as general corporate purposes.

BUSINESS UPDATE:

Andfjord Salmon is pleased to announce significant progress at its land-based aquaculture facility at Kvalnes, Andøya. The build-out of Phase 1 and shared operational infrastructure for the next 12 pools at Kvalnes is expected to be finalized by Q2 2025, in line with the previously communicated timing and budget. Recent design improvements have enabled a 20% increase in production capacity, and the Company has received a term sheet signed by the banks for a NOK 400 million construction loan to support its next expansion phase. Additionally, Andfjord Salmon has signed a term sheet for a sale and leaseback agreement of its Kvalnes harbour area infrastructure for approximately NOK 400 million.

The Company is now planning for immediate start of Phase 2a construction which will allow Andfjord Salmon to benefit from construction synergies due to the continuous process across phases, e.g., through the retention of personnel and use of equipment already on-site, optimizing the resource usage and accelerate execution time.

Please visit the Company's website for an updated company presentation (the “Company Presentation”): https://www.andfjordsalmon.com/en/our-investors/reports-and-presentations/.

SELECTED HIGHLIGHTS FROM THE COMPANY PRESENTATION:

- Through optimized pool utilization, including the implementation of a more efficient and gentle fish logistics system and reinforced concrete walls to enhance water flow, Andfjord Salmon is set to achieve a 20% boost in production output at Kvalnes.

- The current build-out phase (Phase 1) expands production capacity from 8,000 tons to up to 11,000 tons (HOG + post-smolt).

- The total production volume under Andfjord Salmon’s existing license at Kvalnes is expected to increase from 19,000 tons to 23,700 tons.

- The Company’s blended capital expenditure (CAPEX) per kilogram at Kvalnes is estimated to be reduced from NOK 114/kg to NOK 105/kg.

- A term sheet signed by the banks for a NOK 400 million construction loan, with competitive terms provided by SpareBank 1 Nord-Norge, SpareBank 1 Sør-Norge, and SpareBank 1 SMN, supported by Export Finance Norway (Eksfin).

- An overdraft facility of up to 60% of the borrowing base, which is expected to be finalized ahead of the first smolt release, is discussed but not yet committed.

- Andfjord Salmon has also signed a term sheet for the sale of the Kvalnes harbour area to Asset Buoyout Partners, valued at approximately NOK 400 million. The transaction is expected to have a positive cash effect of over NOK 200 million, with NOK 200 million from the proceeds allocated to repaying the existing bank loan linked to the harbour area. The transaction is subject to final agreements and due diligence, with expected signing of the share purchase agreement for the transaction in March 2025. Upon completion, the harbour will be leased back to the Company on an 80-year contract, ensuring continued operational control.

“Our new fish logistics system enhances flexibility in relocating fish between pools, unlocking a significant production increase while maintaining Andfjord Salmon’s industry-leading farming conditions,” says Martin Rasmussen, CEO.

Further, Martin Rasmussen, CEO adds “The expanded loan is a major milestone in our expansion at Kvalnes and a testament to the strong support from our lending partners, who have also backed our Phase 1 development,”

DETAILS ABOUT THE PRIVATE PLACEMENT:

The following investors have pre-committed to subscribe for Offer Shares in the Private Placement:

- The Company's largest shareholder, Jerónimo Martins Agro-Alimentar S.A. (holding 28.04% of the outstanding shares in the Company and represented on the Board by Antonio Serrano), has pre-committed to subscribe for and will be allocated Offer Shares for a minimum of NOK 225 million, however that Jerónimo Martins Agro-Alimentar S.A. will have an ownership of shares in the Company of minimum 30% upon completion of the Private Placement.

- High Liner Foods, a leading North American processor and supplier of seafood (holding 5.38% of the outstanding shares in the Company), has pre-committed to subscribe for and will be allocated Offer Shares for the NOK equivalent of USD 10 million (approx. NOK 111 million).

- Jan Heggelund has pre-committed to subscribe for and will be allocated Offer Shares for NOK 25 million.

In addition, other shareholders and new investors have indicated to subscribe for Offer Shares in the Private Placement for an amount that together with the pre-commitments mentioned above, exceeds the lower end of the Private Placement size range. The Private Placement will be directed towards Norwegian and international institutional investors, in each case subject to and in compliance with applicable exemptions from relevant prospectus or registration requirements.

The bookbuilding period for the Private Placement commences today, 26 February 2025 at 16:40 hours (CET) and closes on 27 February 2025 at 08:00 hours (CET). The bookbuilding period may, at the sole discretion of the Company, in consultation with the Managers, be shortened or extended and may be cancelled at any time. If the bookbuilding period is extended or shortened, the other dates referred to herein might be changed accordingly. Completion of the Private Placement is subject to approval by the Board and approval of the issuance of Offer Shares by an extraordinary general meeting of the Company expected to be held on or about 13 March 2025 (the "EGM").

The minimum subscription and allocation amount in the Private Placement will be the NOK equivalent of EUR 100,000, provided that the Company may, at its sole discretion, allocate an amount below EUR 100,000 to the extent applicable exemptions from the prospectus requirement pursuant to applicable regulations, including the Norwegian Securities Trading Act, Regulation (EU) 2017/1129 and ancillary regulations, are available. The allocation will be determined after the bookbuilding period and conditional allocation will be made at the Board's sole discretion in consultation with the Managers. Notification of conditional allocation is expected to be issued by the Mangers to the applicants on or about 27 February 2025.

The Private Placement is expected to be settled on a delivery versus payment basis on or about 13 March 2025 by delivery of existing and unencumbered shares in the Company that are already listed on Euronext Growth Oslo pursuant to a share lending agreement (the "Share Lending Agreement") expected to be entered into between the Company, Jerónimo Martins Agro-Alimentar S.A and the Managers. The Managers will settle the Share Lending Agreement with new shares in the Company to be resolved issued by the EGM. The Offer Shares allocated to applicants will be tradable from the time the market is notified that the EGM has approved the issuance of Offer Shares.

Completion of the Private Placement is subject to all necessary corporate resolutions being validly made by the Company, including the approval of the Private Placement and the conditional allocation of Offer Shares by the Board and the issuance of the Offer Shares by the EGM. Further, completion of the Private Placement is subject to registration of the share capital increase pertaining to the Private Placement with the Norwegian Register of Business Enterprises and the Offer Shares being validly issued and registered with Euronext Securities Oslo (VPS).

Members of management and key employees will agree with the Managers to a lock-up for a period of 12 months from the settlement date for the Private Placement, subject to customary exceptions. The Company and members of the Company's Board will agree with the Managers to a lock-up for a period of six months from the settlement date for the Private Placement, subject to customary exceptions.

The contemplated Private Placement involves that the shareholders' preferential rights to subscribe for and be allocated the Offer Shares are set aside. The Board has considered the structure of the equity raise in light of the equal treatment obligations under the Norwegian Private Limited Companies Act, the rules on equal treatment under Euronext Oslo Rule Book Part II and the Oslo Stock Exchange's Guidelines on the rule of equal treatment. The Board is of the view that it is in the common interest of the Company and its shareholders to raise equity through a private placement. The Private Placement enables the Company to secure equity financing for advancement of the Company’s Phase 2 construction at Kvalnes, optimization of fish logistics for improved production output, preparations for adherence to expected regulatory changes, as well as general corporate purposes. Further, a private placement will reduce execution and completion risk and allows the Company to utilize current market conditions and raise capital more quickly, at a lower discount compared to a rights issue and without the underwriting commissions normally seen with rights offerings. Further, the Subsequent Offering (as defined below), if implemented, will secure that eligible shareholders will receive the opportunity to subscribe for new shares at the same subscription price as that applied in the Private Placement. On this basis the Board has considered the proposed transaction structure to be in the common interest of the Company and its shareholders.

The Company may, subject to, inter alia, completion of the Private Placement, relevant corporate resolutions, including approval by the Board, prevailing market price of the Company's shares and approval and the publication of a prospectus, consider conducting a subsequent offering of new shares (the "Subsequent Offering") at the same subscription price as in the Private Placement and otherwise in line with market practice. Shareholders being allocated shares in the Private Placement, and shareholders who are resident in a jurisdiction where such offering would be unlawful or would (in jurisdictions other than Norway) require any prospectus, filing, registration or similar action, will not be eligible to participate in a Subsequent Offering. Further information on any Subsequent Offering will be given in a separate stock exchange release when available. The Company reserves the right in its sole discretion to not conduct or cancel any Subsequent Offering.

Advokatfirmaet Schjødt AS is acting as legal advisor to the Company in connection with the Private Placement.