COD – Repurchase of convertible bonds and contemplated rights issue

COD – Repurchase of convertible bonds and contemplated rights issue

Codfarmers ASA (“Codfarmers” or the “Company”) has repurchased convertible bonds with a total nominal value of NOK 22,538,179 under the Company’s convertible bond loan “15 per cent/10.0 per cent Codfarmers ASA Senior Unsecured Convertible Bond Issue 2009/2013” with ISIN N0 001 0398142. The bonds were repurchased for a cash consideration equal to 60% of the nominal value of the bonds (NOK 13,522,908), plus 50% of the accrued interest on the bonds (NOK 717,825). Consequently, the total consideration to be paid by the Company in connection with the repurchase of the convertible bonds is NOK 14,240,733. The Company is of the view that such repurchase of bonds will be beneficial to the Company provided that the repurchase may be financed by the issuance of new shares in the Company.

Based on the above, the Company’s board of directors will propose to the general meeting of the Company that is resolves an increase in the Company’s share capital by way of a rights issue at a subscription price of NOK 6.80 per share, raising gross proceeds of minimum NOK 14,240,733 and maximum NOK 22,733,477, which shall be used for the purpose of financing today’s repurchase of convertible bonds, and any excess amount shall be used to cover transaction costs and general working capital purposes. The contemplated rights issue is expected to be carried out before the end of Q2, 2011.

The Company and its main shareholder Frode Teigen has entered into an agreement whereby Frode Teigen has agreed to underwrite an amount of NOK 14,240,733 of the contemplated rights issue and to provide the Company with an unsecured interest free loan in the amount of up to NOK 14,240,733 for the purpose of financing the repurchase of the convertible bonds in the period from settlement of the repurchase until the net proceeds of the rights issue is available to the Company.

Furthermore, the Company’s board of directors will propose that the Company’s general meeting, in connection with approving the contemplated rights issue, also resolves that the conversion price under the convertible loan issued by the Company for a period of at least 30 days (the “Accelerated Conversion Period”) shall adjusted so that each bondholder in that period may convert its bonds into new shares in the Company at a conversion price of NOK 11.3333 for the principal amount of the bonds and NOK 13.60 for accrued interest (i.e. having the same financial effect for the Company as the financing of the repurchase of bonds referred to above by the contemplated rights issue). Frode Teigen has granted the Company an option to require that he in the Accelerated Conversion Period converts all or some of its bonds in the Company’s convertible bond loan held by him at the conversion price referred to above provided, however, that the Company may not require the conversion of an amount that will bring Frode Teigen’s ownership interest in the Company to above 1/3, including any shares allocated to Frode Teigen in the contemplated rights issue (and thus triggering mandatory offer obligations for Frode Teigen).

“This is an important step in the refinancing of Codfarmers. The repurchase of convertible bonds strengthens the Company’s balance sheet and will give an accounting gain of NOK 5,613,253. The result is that Codfarmers will be placed in a strengthened financial position for its planned growth”, states Harald Dahl, CEO in Codfarmers.

Following the repurchase Codfarmers holds own convertible bonds with a total nominal value of NOK 28,895,079.

The repurchase of the convertible bonds provides Codfarmers with an accounting gain of NOK 5,613,253.

Oslo, 29 April 2011
Codfarmers ASA

For further information, please contact:

Harald Dahl CEO, phone +47 90 11 92 82