Aquaculture for all

$66 million loan sees Proximar Seafood’s Japanese salmon RAS move forward

Atlantic Salmon Hatcheries Recirculating aquaculture systems (RAS) +11 more

Norway-based Proximar Seafood has received a debt financing offer of JPY 8.8 billion ($66 million) for its land-based salmon farming facility outside Tokyo.

Parts of Proximar's salmon RAS are currently under construction

The newly-agreed loans will allow the firm to finish building its land-based salmon facility in Shizuoka Prefecture, Japan © Proximar Seafood

The offer, which consists of loans from two large Japanese banks, will allow Proximar to meet its goals as it progresses on building its first salmon RAS facility in Shizuoka Prefecture, Japan. Proximar received a highly confident letter and term sheet with the deal, saying in a press release that the letter, “[is considered] to be a strong statement of comfort from the banks,” for providing the firm with the necessary financing. Proximar declined to name the banks it used for debt financing.

"We are delighted to finally see the entire debt financing now coming in place for our stage 1 facility. 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," Joachim Nielsen, CEO of Proximar said in the press release.

According to the release, 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 approximate 45 percent debt ratio ambition.

The letter and term sheet received by Proximar has been approved internally in the two banks. The loan offer is structured as a syndicate, fully covered by the involved institutions. The loan has an interest rate below 5 percent and addresses both the remaining construction financing as well as operational financing.

The facility's first batch of salmon

Proximar broke ground on its salmon RAS in 2021 and started working with its first batch of eggs in October 2022 © Proximar Seafood

The company says 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 of take-over of the post-smolt grow-out building.

‍Proximar broke ground on its salmon RAS in 2021 and has completed work on its hatchery facility at time of publishing. It started working with its first batch of eggs in October 2022 and says that the juveniles are thriving at the first feeding stage. It currently has three batches in production and expects new batches to arrive monthly to facilitate continuous harvest in 2024.

The firm reports that construction work on its post-smolt facility is underway and on schedule. It also says that it is installing tanks an RAS equipment; and expects that the entire facility will be complete by Q3 2023.

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