REFINANCING DUE TO SUBSTANTIAL LOSSES
Codfarmers ASA has suffered substantial losses as fish being ready for harvesting at two locations in Møre has been hit by diseases. This, in combination with low prices in the market for cod, has brought the Company into a difficult liquidity position.
Substantial portions of the biomass at two locations in Møre have been destructed. The remaining portions of the biomass at these locations have been downgraded, and have therefore been sold at prices lower than those otherwise achievable. The destruction and downgrading have caused an extraordinary loss of around NOK 25 million, which has a negative impact on the Company’s cash position in the same amount.
In general, the market for whole cod and cod fillets has been characterized by low prices. The volume of our STRØM product is not large enough to compensate for low spot market prices, even though the sale of the STRØM product has increased by 100% this year.
Diseases and low prices have brought the Company into a difficult liquidity position, and alternatives for refinancing the Company are being worked on. These will have to imply that additional cash resources are made available to the Company, which again will be subject to a restructuring of the Company’s debt.
Based on the above, the Company has resolved to implement extensive cost reductions. As a part of this, planned releases of juveniles will be substantially reduced, and the Company will divest subsidiaries, locations, equipment and land bases.
Downscaling of operations, restructuring of debt and sale of assets will reduce the Company’s cost base to a level where the largest shareholders may be willing to contribute to the financing of the Company.
The Company will call for an extraordinary general meeting to be held in December.
The Company has resolved to postpone the release of its Q3 report to 30 November 2012.
For further information, please contact:
Harald Dahl, CEO of Codfarmers, telephone +47 90 11 92 82