COD – LETTER OF INTENT FOR THE SALE OF ATLANTIC COD FARMS

Codfarmers ASA (“Codfarmers” or the “Company”) has entered into a letter of intent with a financially strong industrial player regarding Codfarmers’ sale of Atlantic Cod Farms AS and its subsidiaries (“ACF”), other than Festøy Eiendom AS. The parties have agreed on a value of the assets and rights of ACF in the amount of NOK 40 million, and that the debt in ACF shall be deducted when determining the price for the shares in ACF. Codfarmer’s loan to ACF, which currently is in the amount of NOK 55 million will be converted into shares in ACF. The main portion of the amount of NOK 40 million will be used for repayment of third-party debt in ACF.

Completion of the transaction is inter alia subject to the buyer’s due diligence review of ACF, the parties agreeing on a final share purchase agreement, and that the transaction is being approved by the boards of directors of the parties and by relevant authorities.

It is uncertainty attached to whether and if so, when, the transaction will be completed.

For additional information, please contact:

Marianne E. Johnsen, Chair of Codfarmers, telephone +47 93 66 30 00
Harald Dahl, CEO of Codfarmers, telephone +47 90 11 92 82

About Us

ABOUT CODFARMINGCOD BOOM The latest issue of “norsk Fiskeoppdrett” (#10, October 2007, www.kyst.no) focused on the development in cod farming and predicted a boom within the coming two years in this relatively new industry. The following extract of just one of the articles offers a brief background for the prediction. THE TABLE IS SET FOR COD Traditionally, the battle for fishing rights has been very hard. In recent history, it should suffice to mention the cod war between UK and Iceland, Canada throwing Portuguese and Spanish vessels out of its national waters when fishing at Grand Banks, as well as Iceland’s demand for fishing rights in what Norway considered Norwegian territorial waters. In 1987 2.1 million ton cod was caught in the North Atlantic. Since then, landings of North Atlantic cod has been reduced by more than 1.2 million tons down to 0.8 million tons in 2006. Iceland has announced a quota reduction in 2007/8 of 30% amounting to 65,000 tons of cod – this equals two years of total volume of cod caught in the Norwegian Lofoten fisheries. In the Barents Sea, quotas seem to remain stable so far. Volumes of cod from the North Atlantic appear to remain relatively stable in the medium-term and the gap between supply and demand has to be filled by aquaculture. THE MARKET Cod is no new species. With a global market of more than a million tons, the cod farmers don’t have to worry about first building the market. In Europe alone, 100,000 tons of fresh cod is sold annually. It is possible to increase this volume considerably with fresh cod and cod products without impacting prices negatively. Once can make a small comparison with the salmon farmers who produced 600 tons in 1974. They had to develop a whole new market for their products, which until then had been a small niche market. The cod farmers come to a table already set. They only need to fill it with good quality products. Extract of article in the publication “norsk FISKEOPPDRETT” Nr. 10, October 2007 (www.kyst.no), by Stein-Ove Hansen, Analyst, Terra Securities (un-official translation by Codfarmers)

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