The agreement on sale of the shares in Nye Midnor to Lerøy Seafood Group has been signed with the proviso that the owners of Midnor Group do not exercise their right to acquire all the shares in Nye Midnor from Sparebanken Midt-Norge by paying a cash amount which results in settlement of the bank's total commitment associated with Midnor Group AS with subsidiaries and Nye Midnor AS without loss for the bank. This right expires on 15 November 2003. The agreement on sale of the shares in Nye Midnor has also been signed with a proviso on approval from the Board of Directors at LSG by Wednesday 29 October 2003, as well as completion of due diligence by 15 November 2003.
The payment for the shares is NOK 105 million in cash as well as 2.3 million new shares in LSG. With the closing price for the LSG share of NOK 28.50 on Friday 24 October 2003, this gives a total value of NOK 170 million for the bank's shares. The new shares in Lerøy Seafood Group will be issued in accordance with the authorization to the Board granted at the annual general meeting on 22 May 2003. The settlement shares will amount to approximately 7.25 per cent of the new number of shares outstanding in Lerøy Seafood Group.
As the new owner of Nye Midnor AS, LSG will provide the company with NOK 75 million in new equity capital. LSG will also provide security, including a guarantee totalling NOK 50 million to Sparebanken Midt-Norge for Nye Midnor's involvement with the bank. Under the agreement, the bank's total loans to Nye Midnor AS will be reduced to NOK 400 million by 31 December 2003.
SMN and LSG have agreed that a final agreement on sale of the shares in Nye Midnor is to be signed at the latest by Saturday 15 November 2003, as soon as the right of the owners of Midnor Group to acquire the same shares expires. Settlement will take place 14 days after the final agreement has been signed.
Nye Midnor's activities comprise production of fry and smolt (primarily for use in its own production of food fish) with 5 wholly owned hatchery permits, aquaculture production with 26 wholly owned food-fish permits for salmon and trout, as well as facilities for slaughtering and further processing. The company has about 200 employees, with its head office at Hitra. All production is located along the coast in the county of Møre og Romsdal as well as Central Norway.
Nye Midnor also owns 66.6 per cent of the shares in the export company Terra Seafood AS, as well as approximately 16.5 per cent of the shares in West Fish Aarsæther AS, which catches and processes white fish. Nye Midnor's ownership of the shares in West Fish Aarsæther AS will cease before entry into a final agreement on sale of the shares in Nye Midnor.
In the light of factors including the company's capital adequacy and its firm industrial foothold, Sparebanken Midt-Norge regards Lerøy Seafood Group as a good long-term owner for continuation of the activities in Nye Midnor. Lerøy Seafood Group is an important and long-standing player in the Norwegian fishing industry. In 2002 the company was Norway's largest exporter of seafood, with about 7.6 per cent of the total export value of Norwegian seafood.
In the same period, LSG was also the largest exporter of farmed salmon products from Norway, with a market share of some 12 per cent. The group has a strong focus on processed products, product development, marketing and distribution. The Group's global sales and marketing activities are based in Norway, but are supported by a number of sales offices and sales companies in all the most important markets for seafood. Lerøy Seafood Group also has substantial investments in aquaculture, through its holdings in Norskott Havbruk AS (50 per cent holding) and Hydrotech Gruppen AS (39 per cent holding).
Lerøy Seafood Group's equity at 30 June 2003 was approximately NOK 638 million, corresponding to an equity ratio of about 59 per cent. At the same date the group had no net interest-bearing liabilities, and it has very good liquidity.
Sparebanken Midt-Norge and Lerøy Seafood Group will hold a joint press conference today at the bank's premises at 11.00 am.
In a comment the Managing Director, Finn Haugan, stated the following. As early as November 2002, Helge Gåsø was aware that in the bank's opinion Midnor Group AS faced considerable challenges. The company chose to implement its own measures to solve the problems, which intensified during the spring of 2003. They did not succeed, and early in July there was no alternative to compulsory liquidation for Midnor Group AS. The bank then chose instead to take over the enterprise to operate it further for a period of time. It is unfortunate that the former local owners did not prove capable of establishing a basis for take-over and further operation of Nye Midnor AS. We are therefore now very satisfied that one of Norway's most solid fishery enterprises, Lerøy Seafood Group ASA, with solid branding nationally and internationally as well as long experience in the ownership of local fishery enterprises, is taking over Nye Midnor AS. In my opinion this is absolutely the best solution for the company, its employees and the local communities on the islands of Hitra and Frøya. In addition to the fact that LSG is paying a satisfactory price for the bank's shares, LSG is providing Nye Midnor A/S with significant equity capital and guarantees so that company's future is secured. LSG also contributes through long-term contracts to activities in Frøy Sjøtransport A/S, another of Helge Gåsø's companies.
Any enquires may be addressed to:
Finn Haugan, Managing Director, mobile tel. +47 900 41 002
Rune Malvik, Bank Director, mobile tel. +47 911 40 126