Reference is made to the stock exchange notice dated 6 December 2013, and the notice of Extraordinary General Meeting attached thereto, in particular the Board's account for item 5 a) on the agenda. This notice has been prepared and disclosed pursuant to section 3.4.1 and 3.4.2 of the Continuing Obligations of stock exchange listed companies.
The Transaction
The Company has negotiated an agreement with Hofseth International AS ("Hofseth International") (the "Agreement") which (indirectly) is a shareholder in the Company through its subsidiaries Hofseth AS ("Hofseth") and Seafood Farmers Holding AS ("SFF"). In accordance with the Public Limited Liability Act § 3-8, the Agreement will be presented for approval by the Company's general meeting in an extraordinary general meeting to be held 27 December 2013. Roger Hofseth has not participated in the management and Board's work with the Agreement since he (indirectly) is a significant shareholder and holds positions in Hofseth International/its subsidiaries.
Under the Agreement the Company will transfer its remaining right to delivery of prepaid by-products (fish offal) from Hofseth and SFF to Hofseth International. Per 31 December 2013 it is assumed that the Company will have a remaining right of delivery corresponding to appr. 12 000 net tons (4000 net tons from SFF and 8000 net tons from Hofseth, respectively (the "Remaining Obligation")), and it is estimated that the Company at this date will have an outstanding debt to Hofseth International of appr. MNOK 15.5 (the "Outstanding Debt").
The consideration to be paid by Hofseth International to the Company for the Remaining Obligation is partly a payment in kind and partly a payment in cash which will be set of against the Outstanding Debt.
The payment in kind consists of a quantum of by-products equal to the quantity that will be delivered under Remaining Obligation, but where the Company will pay NOK 1.35 per kilo.
The cash consideration represents the net present value of the Company's cash payments under the payment in kind (appr. 12 000 tons * NOK 1.35), assuming equal monthly deliveries over 12 months and a discount rate of 6.5%.
Since the cash consideration will be determined based on the actual Remaining Obligation as per 31 December 2013, the total cash consideration to be paid by Hofseth International and the size of the Company's Outstanding Debt against which the cash consideration will be netted, will not be clear before in January 2014. Based on the assumed quantity under the Remaining Obligation, the cash consideration will be NOK 15 643 755.
The right of delivery of by-products has been recognized in the Company's third quarter financial statement to have a value of NOK 21 117 555.
Consequences of the Transaction for the Company
The Transaction ensures that Company will comply with its payment obligations towards Hofseth International. At the same time the Company will enter into a new long-term agreement for delivery of appr. 30 000 tons of by-products from Hofseth and SFF, securing access to a significant portion of the amount of by-products the Company need for its production.
This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.