Norway Royal Salmon ASA (NRS): Carve-out and sale of Region South

This notice is prepared and published in accordance with section 3.4.1 and 3.4.2 in Continuing Obligations for companies listed on Oslo Børs.

Norway Royal Salmon ASA (NRS) has entered into an agreement with Tombre Fiskeanlegg AS, Lingalaks AS and Eidesvik Laks AS (the Buyers) regarding the sale of all shares in Sør Farming AS (the Transaction), a wholly owned subsidiary of NRS, which subject to the completion of a demerger of NRS Farming AS, will own NRS Farming AS' salmon farming business "Region South". 

As consideration for the shares in Sør Farming AS a purchase price of NOK 1,240 million on a cash and debt free basis has been agreed. The purchase price shall be settled in cash and is financed by the Buyers partly through equity and partly through debt financing. 

In connection with the Transaction, the parties have also entered into a long-term cooperation with regards to sale and purchase of fish. 

The Transaction is estimated to close in December 2019, and is subject to the demerger of NRS Farming AS being completed. 

"The strategic assessment of Region South is now completed, and we have decided to sell the business. NRS is pleased with the achieved purchase price, and that we can continue to develop our cooperation with the Buyers with regards to export of fish, and thus also continue to strengthen our sales department. We are also pleased that the Buyers are local, and have the ambitions and resources to continue to develop the business," says Charles Høstlund, group CEO of Norway Royal Salmon. 

Description of Region South / Sør Farming AS

The business in Region South that is to be carved out from NRS Farming AS to Sør Farming AS owns and operates six salmon farming licenses with a total maximum allowed biomass (MAB) of 4,680 tonnes in the area around Haugesund. The business has approximately 30 employees, and is managed by region director Rolf Berg. 

The board of directors of Sør Farming AS is currently comprised of Charles Høstlund and Ola Loe, but the composition of the board will be amended after the closing of the Transaction. 

Key figures profit and loss for Region South

Historic balance sheet figures for the business are not available, as the business is established through a demerger of an existing business. 

The Transaction is part of NRS' strategy to concentrate and strengthen its operations in Northern Norway and in Iceland. 

"Through the sale of this business, we intend to focus our activities on Northern Norway and Iceland. The company has large investments which will contribute to develop our business in the north. Our ambition is to develop the fish farming industry for the future through the continued development of our operations, innovation and new technology, and we intend to do this with Northern Norway at the center of our efforts. The Transaction provides NRS with more financial flexibility to assess new opportunities for growth," says Charles Høstlund. 

Bonus agreements with certain key employees in region South have been entered into in connection with the Transaction.  

DNB Markets is acting as NRS' financial advisor in connection with the Transaction and Advokatfirmaet Wiersholm is acting as NRS' legal advisor in connection with the Transaction. 

For more information, please contact: 

· CEO Charles Høstlund, +47 994 18 449 

· CFO Ola Loe, +47 911 79 411. 

Norway Royal Salmon ASA in brief 

Norway Royal Salmon ASA (NRS) group owns 34,746 tonnes MAB located in West Finnmark and Troms. In addition, the group has minority interests in three associated Norwegian fish farming companies, which together own ten fish farming licenses, as well as Arctic Fish in Iceland. NRS is an attractively positioned fish farming group, which offers salmon to the market through its own sales organisation. For further details, please visit www.norwayroyalsalmon.com.