Private placement up to NOK 860 million September 2006 Solely for review in connection with the Private Placement – not for reproduction or distribution. The information contained herein may be subject to change without prior notice. Please note that this is not an offering document
Disclaimer and responsibility statement This Presentation has been produced by Austevoll Seafood ASA (the “Company” or “Austevoll Seafood”) solely for use at the presentation to investors held in connection with the proposed private placement of shares by the Company and may not be reproduced or redistributed, in whole or in part, to any other person. This document contains certain forward-looking statements relating to the business, financial performance and results of the Company and/or the industry in which it operates. Forward-looking statements concern future circumstances and results and other statements that are not historical facts, sometimes identified by the words “believes”, expects”, “predicts”, “intends”, “projects”, “plans”, “estimates”, “aims”, “foresees”, “anticipates”, “targets”, and similar expressions. The forward-looking statements contained in this Presentation, including assumptions, opinions and views of the Company or cited from third party sources are solely opinions and forecasts which are subject to risks, uncertainties and other factors that may cause actual events to differ materially from any anticipated development. None of the Company, Dn. B NOR Markets, SEB Enskilda or Pareto Securities ASA or any of their parent or subsidiary undertakings or any such person’s officers or employees provides any assurance that the assumptions underlying such forward-looking statements are free from errors nor does any of them accept any responsibility for the future accuracy of the opinions expressed in this Presentation or the actual occurrence of the forecasted developments. The Company assumes no obligation, except as required by law, to update any forward-looking statements or to conform these forward-looking statements to our actual results. AN INVESTMENT IN THE COMPANY INVOLVES RISK, AND SEVERAL FACTORS COULD CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE COMPANY TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS THAT MAY BE EXPRESSED OR IMPLIED BY STATEMENTS AND INFORMATION IN THIS PRESENTATION, INCLUDING, AMONG OTHERS, RISKS OR UNCERTAINTIES ASSOCIATED WITH THE COMPANY’S BUSINESS, SEGMENTS, DEVELOPMENT, GROWTH MANAGEMENT, FINANCING, MARKET ACCEPTANCE AND RELATIONS WITH CUSTOMERS, AND, MORE GENERALLY, GENERAL ECONOMIC AND BUSINESS CONDITIONS, CHANGES IN DOMESTIC AND FOREIGN LAWS AND REGULATIONS, TAXES, CHANGES IN COMPETITION AND PRICING ENVIRONMENTS, FLUCTUATIONS IN CURRENCY EXCHANGE RATES AND INTEREST RATES AND OTHER FACTORS. SHOULD ONE OR MORE OF THESE RISKS OR UNCERTAINTIES MATERIALISE, OR SHOULD UNDERLYING ASSUMPTIONS PROVE INCORRECT, ACTUAL RESULTS MAY VARY MATERIALLY FROM THOSE DESCRIBED IN THIS PRESENTATION. THE COMPANY DOES NOT INTEND, AND DOES NOT ASSUME ANY OBLIGATION, TO UPDATE OR CORRECT THE INFORMATION INCLUDED IN THIS PRESENTATION. No representation or warranty (express or implied) is made as to, and no reliance should be placed on, any information, including projections, estimates, targets and opinions, contained herein, and no liability whatsoever is accepted as to any errors, omissions or misstatements contained herein, and, accordingly, none of the Company, Dn. B NOR Markets, SEB Enskilda or Pareto Securities ASA or any of their parent or subsidiary undertakings or any such person’s officers or employees accepts any liability whatsoever arising directly or indirectly from the use of this document. By attending this Presentation you acknowledge that you will be solely responsible for your own assessment of the market and the market position of the Company and that you will conduct your own analysis and be solely responsible forming your own view of the potential future performance of the Company’s business. This Presentation is confidential and is being communicated in the United Kingdom to persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (such persons being referred to as “investment professionals"). This presentation is only directed at qualified investors and investment professionals and other persons should not rely on or act upon this presentation or any of its contents. Any investment or investment activity to which this communication relates is only available to and will only be engaged in with investment professionals. This Presentation (or any part of it) is not to be reproduced, distributed, passed on, or the contents otherwise divulged, directly or indirectly, to any other person (excluding an investment professional’s advisers) without the prior written consent of Pareto Securities ASA, Dn. B NOR Markets, SEB Enskilda and the Company. This Presentation and the information contained herein do not constitute an offer of securities for sale in the United States and are not for publication or distribution to U. S. persons (within the meaning of Regulation S under the U. S. Securities Act of 1933, as amended (the “Securities Act”)). The securities proposed to be offered in the Company have not been and will not be registered under the Securities Act and may not be offered or sold in the United States or to U. S. persons except pursuant to an exemption from the registration requirements of the Securities Act. This Presentation speaks as of 20 September 2006. Neither the delivery of this Presentation nor any further discussions of the Company with any of the recipients shall, under 2 any circumstances, create any implication that there has been no change in the affairs of the Company since such date.
Presenting team • Ole Rasmus Møgster (47 years) - Chairman of the Board – CEO of Austevoll Havfiske AS, main owner of LACO AS, which is the main shareholder of DOF ASA and Austevoll Havfiske AS. Mr Møgster has long experience from fish harvesting, fish processing and salmon farming. Holding board positions in several companies • Arne Møgster (30 Years) - CEO – Bachelor of Business and Administration and MSc International Shipping. He has been working in subsidiaries of LACO AS since 1997, holding experience from the fishing, shipbuilding and offshore supply market. He has been working one year in Brazil and has held the position as Managing Director of Norskan AS since 2003. • Britt Kathrine Drivenes (43 Years) - CFO – Bachelor of Business administration. Started in Austevoll Havfiske AS in 1991 and has held the position as CFO since 1996. Mrs. Drivenes has a wide experience in the fish harvesting, fish processing and fish farming market. 3
Key investment considerations 1. Fully integrated fishing company with licenses to participate in the world’s largest pelagic fisheries 2. Strong revenue and earnings growth expected driven by response to market trends – Strong consumer demand for protein rich marine products – Shift from fish meal products to consumer products with higher margins 3. Proactive strategy in the further consolidation of the seafood industry – Acquisitive growth within the global pelagic fisheries – Both organic and acquisitive growth within salmon farming in Chile and Norway 4. Majority owner and management with strong track-record within the seafood industry Listing expected on the Oslo Stock Exchange in October 2006 4
Introduction to the pelagic fish industry • Fish species that live in the upper sea-levels and appears in huge schools, caught by purse seiners and trawlers • Most important species: anchoveta, mackerel, horse mackerel, herring, blue whiting, capelin • Fish meal and fish oil: mainly anchoveta, blue whiting, capelin and trimmings • Human consumption: mackerel, horse mackerel and herring • Fish meal and fish oil are mainly used as major feedstock in the production of animal and fish feed 5 Total wild catches 37. 3 mill tons in 2004 Major share in the dominant regions
A major pelagic harvesting, processing, salmon and distribution company Peru Chile Norway Austevoll Seafood (Group) Activities Harvesting capacity 8. 05% of holding capacity, pelagic fishing fleet - 34 vessels 9. 1% of pelagic fishing quota - 5 vessels - 2 vessels with 2 licenses through (B Birkeland AS) - 27 farming licenses + 5 Associated Processing 6 meal & oil plants 2 canning plants 1 freezing plant (new) 2 meal & oil plants 1 canning plant 1 freezing plant 4 meal & oil plants 60% market share 1 storage/blending 600 -650, 000 tons of fish - 41 vessels 19 processing plants Handling 1. 2 mill tons of fish annually 1 freezing plant Sales & Distribution Own sales organisation Wholesale with global distribution Revenues 05 P EBITDA 05 P NOK 751 mill NOK 152 mill NOK 492 mill NOK 154 mill NOK 1 618 mill NOK 218 mill NOK 3 170 mill NOK 573 mill 6
Well positioned to respond to expected growth in seafood consumption Market outlook • Catches of pelagic fish to remain at current levels • Fish food per capita consumption to increase • Aquaculture to continue high growth • World fish supply Expected shortage of pelagic fish Source: FAO 7
Common feedstock with flexibility to change product mix Raw materials Processing Distribution Blue whiting Aqua/Animal feed industry Anchoveta Animal / fish feed producers Refining Products • Fish feed • Fish oil Wholesale Mackerel and horse mackerel Human consumption Herring Wholesale Freezing Canning Fresh Trading / import houses Salmon • Large fishing quotas in Chile and Peru Austevoll positioning • Processing capacity for all own volume / catches • Strategically well located to capture volumes from other vessels / partners • Processing facilities are flexible as to product mixes to capture maximum yield and profit 8 • Canned fish products • Frozen fish products • Fresh fish (whole/fillets) • Experienced sales teams • Products are sold wholesale
Pelagic fish – a sustainable resource • Annual catches expected to remain at 35 -37 mill tons • Anchoveta catches in Peru have averaged some 7 -8 mill tons over the last 15 years and are expected to remain at this level • Anchoveta catches in Chile expected to remain at 1. 5 m tons Stable volume development over the last 15 years *) mainly utilized for fish meal and fish oil production Source: Kontali Analyse 9
Demand for fish meal driven by growth in aquaculture 2002 2010 Source : IFFO • • Aquaculture industry willing to pay higher prices than other users of fish meal due to much more efficient feed utilization and lower feed conversion factors Growth in use of fish meal by the aquaculture industry is expected to increase prices for both pelagic fish and fish feed 10
Fish meal and fish oil prices increasing Historical development in fish meal and fish oil prices • Strong increase in fish meal prices • Graph showing cif prices Hamburg Last update 5 September 2006 – Fob prices in Peru and Chile approx USD 150 per ton lower due to freight and handling costs • Price increase mainly due to – increased demand from the animal and fish feed industries – limited supply of feedstock Source: Kontali Analyse 11
Sharp increase in price for Norwegian pelagic fish due to increased demand from human consumption Frozen Atlantic mackerel Frozen herring Source: Eksportutvalget for fisk/SSB • • Almost all herring and mackerel landed in Norway goes to human consumption The shift from being feedstock to fish meal and fish oil to products for human consumption has increased prices and margins significantly 12
… and the same shift in demand structure for pelagic fish is expected for Chile and Peru Chile – use of horse mackerel • Norway - • Chile – shift in demand well on its way - • Almost all landings of Atlantic mackerel and herring goes to human consumption Strong shift towards human consumption of horse mackerel due to strong increase in demand Peru - Expected to follow same trend as Chile 13
Food. Corp S. A (Chile) • One of the leading Chilean pelagic fishing and processing companies – – – • 5 catching vessels with 9. 1% of Chilean total pelagic quota 120, 000 tons own catch pelagic: horse mackerel and mackerel 100, 000 tons anchoveta purchased externally 2 fish meal plants 1 canning plant 1 new freezing plant Current product mix – Frozen and canned products for human consumption: 39, 000 tons – Fish meal: 39, 000 tons – Fish oil: 6, 000 tons • Salmon farming – Expected start up 2007 14
Further shift towards food products will increase margins Harvesting Input 220, 000 MT Final products 84, 000 MT Gross margin produced per ton of input Price assumptions USD/ton USD 45, 000 Fish 860 Meal & Oil 120, 000 MT Own harvesting 88 Fish meal & Fish oil 370 22, 000 Canned 255 1 182 370 600 17, 000 Frozen 100, 000 MT External Canned Frozen 15
Austral Group S. A. A (Peru) • One of the leading Peruvian pelagic fishing and processing companies – – – – • 88% owned by Austevoll Seafood, will bid for remaining shares 34 catching vessels with total holding capacity of 14, 507 tons Has 8. 05% of total Peruvian pelagic fleet capacity 400, 000 tons own catch pelagic, mainly anchoveta and horse mackerel 110, 000 tons purchased externally 6 fish meal plants 2 canning plants 1 freezing plant Current product mix – Frozen and canned products for human consumption: 24, 000 tons (to be increased significantly) – Fish meal: 105, 000 tons – Fish oil: 22, 000 tons 16
Austral has same potential to increase margins by shifting product mix towards food products Input 510, 000 MT Final products 151, 000 MT 127, 000 Gross margin produced per ton of input Price assumptions USD/ton 100 810 107 1 363 350 Harvesting 600 Fish meal 400, 000 MT Fish meal Own harvesting & Fish oil & Oil 22, 000 Canned 2, 000 F/F 110, 000 MT External Canned Frozen/ Fresh • Also considerable margin improvement potential within canning by reducing product diversity 17
Food. Corp has lead the way in optimizing product mix towards human consumption products Austral (Peru) Foodcorp (Chile) • Balanced product mix • Huge potential in copying development in Chile • Steady catching volumes • Additional effect from increasing mackerel catches • New freezing plant to drive up frozen volumes • Significant growth expected for frozen products 18
Austevoll Seafood Norway • Leading Norwegian seafood group with diversified activities – Welcon • 4 fish meal plants, 1 storage and blending plant with 60% market share of total production of fish meal in Norway • 80, 000 tons fish meal • 18, 000 tons of fish oil – Austevoll Fiskeindustri • Modern fish processing plant, cold storage, freezing plant – Br. Birkeland • 2 top modern purse seiners with 2. 95% of Norwegian pelagic quota (associated company 36%, will increase to 40%) – Sea Star International • Seafood trading – Veststar • Salmon farming • 27 own licenses + 5 licenses through Br. Birkeland 19
Austevoll Seafood Group pro forma P&L • As a result of fishing seasonality, a majority of the catch in both South America and Norway is landed in the first half of the year, causing inventories and working capital to peak at midyear • • • Annual depreciations expected at NOK 220 m • From 3 Q 2006 excess value on inventory realized will be written off on a separate line to show normalised EBITDA • 2005 revenues and EBITDA include NOK 171 m in gain from sales of assets Cap-ex expected around NOK 120 m As a consequence of the acquisition analysis of Welcon and Austral, the excess values have been allocated to intangible assets, fixed assets and inventory NIBD NOK 1, 728 m as of 30 June 2006 Pro-forma figures are un-audited 20
Segment information and guidance 21
Way forward • Pelagic – Active participation in the further consolidation of the pelagic fish industry – Attractive acquisition opportunities • Salmon farming – Organic growth – Acquisitions • Omega 3 – Functional food ingredients 22
Transaction Summary Timetable Private placement • NOKm 760 -860 (approx USDm 125) Private Placement – Directed towards institutional and professional investors – US investors may subscribe according to 144 A (QIBs only) – must submit investor representation letter Allocation: On or about 6 October 2006 • • Book building: NOK 38 - 43 per share Subscription period: – Starting Monday 25 September – Closing 5 October at 6. 00 pm CET • (subject to extension and earlier closing) • • Use of proceeds: To finance acquisitions and organic growth • Delivery : On or about 11 October 2006 – Delivery versus payment (DVP) settlement will be made available pursuant to a lending agreement between Laco AS and the Managers. • No of shares pre transaction: 158. 2 million • No of shares to be issued: 20 million • Minimum order and allocation: NOK equivalent to 50, 000 Euro Listing • Allocation criteria: Investor quality • Documentation: Subscription Agreement, Investor Presentation, Term sheet • • • Managers: Pareto Securities ASA, Dn. B NOR Markets, SEB Enskilda ASA 23 Listed on OTC under ticker: AUSS Listing on Oslo Stock Exchange expected mid October 2006
Austevoll Seafood Appendix 24
Organisation Structure Austevoll Seafood Organisation Board of Directors: Ole Moegster (Chairman) CEO Arne Moegster Helge Moegster Director, legal affairs Tore Reed Mohn CFO Britt Kathrine Drivenes Oddvar Skjegstad Hilde Waage Inga Lise L. Moldestad Foodcorp CEO Esteban Urcelay Austral CEO Adriana Giudice Welcon CEO Arne Stang Austevoll has 4, 000 employees CFO Andres Daroch 25
Legal structure 26
Curriculum Vitae - Board of directors • Ole Rasmus Møgster (47 years) Chairman of Austevoll Seafood – • Helge Møgster (53 Years), Member of the board – • Master of Business and Administration. Self employed, with a wide experience from executive positions in public administration, bank and industrial activity. Engaged in board activities within several different business sectors. Hilde Waage (41 Years), Member of the board – • CEO and Main Shareholder of LACO AS. Mr Møgster has long experience from the fish harvesting and offshore supply market. Holding board positions in several companies. He is the Chairman of DOF ASA and Geo ASA, both listed on Oslo Stock Exchange. Oddvar Skjeggstad (55 Years), Member of the board – • CEO of Austevoll Havfiske AS, main owner of LACO AS, which is the main shareholder of DOF ASA and Austevoll Havfiske AS. Mr Møgster has long experience from fish harvesting, fish processing and salmon farming. Holding board positions in several companies. CEMS Master. Senior Business Consultant in Mercuri Urval AS. Mrs Waage holds a wide experience from bank, fishing and industry, and was working in Chile for 4 years. Inga Lise L. Moldestad (39 years), Member of the Board – NHH (Norwegian School of Economics) MSc. CEO and partner in Holberg Fondsforvaltning, a Bergen based asset management company. Extensive experience from Unibank Asset Management, Skandia Asset Management, and Arthur Andersen. 27
Curriculum Vitae - Key management • Arne Møgster (30 Years) - CEO in Austevoll Seafood ASA – Bachelor of Business and Administration and MSc International Shipping. He has been working in subsidiaries of LACO AS since 1997, holding experience from the fishing, shipbuilding and offshore supply market. He has been working one year in Brazil and has held the position as Managing Director of Norskan AS since 2003. • Britt Kathrine Drivenes (43 Years) - CFO in Austevoll Seafood ASA – Bachelor of Business administration. Started in Austevoll Havfiske AS in 1991 and has held the position as CFO since 1996. Mrs. Drivenes has a wide experience in the fish harvesting, fish processing and fish farming market. • Tore Reed Mohn (55 years) - Director of legal affairs, Austevoll Seafood – Law degree from University of Bergen. Worked in Austevoll Seafood since 1997. Former experience from Finansbanken (legal dept. ) and Nordbanken. • Esteban Urcelay (53 years) – CEO of Foodcorp S. A. (Chile) – Has been leading this Chilean pelagic fishing Company since it was founded in 1984. Board member of the Industrial Fishing Association in Chile. Member of the Executive Committee of Austral Group S. A. A. • Adriana Giudice (43 years) – CEO of Austral Group S. A. A. (Peru) – Attorney at Law. Joined Austral as legal advisor in 2000. Member of the Board of the National Fisheries Society of Peru. Previously held the position of chief of legal advisors of Peruvian Fishing Ministry, vice president of the Consumer Protection Commission and partner in a leading Peruvian law firm. • Andres Daroch (46 years) – CFO South America of Austevoll Seafood – Business Administrator, major in Finances. Vice Managing Director of Foodcorp S. A. , Chile. Previously held position of CFO in different companies of the Møgster Group in Chile • Arne Stang (56 years) – CEO Welcon Invest AS – Shipping engineer. Established own company in late 1970 s within electronics and real estate. Bought Stang Måløy Fish Oil Plant in 1994, later sold to Pan Fish. Stang was chairman of the Board in Pan Pelagic from 1994, and was in charge of Pan Fish’ operations within fish meal and –oil. 28
Company history • Austevoll Seafood has been created based on Austevoll Havfiske AS, one of the top pelagic fishery and salmon farming companies in Norway, with subsequent acquisitions of business units in Norway, Chile and Peru, owned 98. 3% by Helge Møgster and Ole Rasmus Møgster • Helge Møgster and Ole Rasmus Møgster have founded, developed, and controls 56% of DOF, a public oil services company with a market cap of NOK 3, 700 m, owning and operating supply and anchor handling vessels, as well as various specialised vessels • Austevoll Havfiske AS – 1981: Company established by Helge, Ole, and their father as pelagic fishery company and fish farming company – 1991: Started Pacific Fisheries in Chile – Austevoll Havfiske has since been developed into Norway’s leading pelagic fishery company – 2000: Merged with Laco II, a holding company for a salmon farming company – Acquisitions: – 2000: Br Birkeland, 36 %, an owner of fishing vessels and salmon farming operations – 2002: Food. Corp, Chile, 100 % – 2004: Austral, Peru, 28. 4 % – 2004: Welcon, Norway , 31 %, – 2006: Increased Austral ownership to 86% – 2006: Increased Welcon ownership to 93% – 2006: Increase Br Birkeland ownership by 4 -11% – 2006: Demerging of fishing vessel companies, creating Austevoll Seafood, aiming for listing at OSE 29
Shareholder structure • As of 19 September 2006 Austevoll has some 1 750 shareholders 30
Austevoll Group - Pro forma balance sheet 1 H 2006 1) NIBD NOK 1, 728 m as of 30 June 2006 1) Deferred taxes calculated on book value of licenses have been included in the balance sheet when implementing IFRS, even tough this will not materialise in the foreseeable future, and as such has fair value of nil. IFRS requires deferred taxes to be calculated without considering fair value. Pro-forma figures are un-audited 31
Welcon ASA • Norway’s largest fish meal producer – 4 fish meal plants, capacity 8, 000 tons/day – 1 large storage, blending and refining unit – Pelagic raw material purchase: 400, 000 tons • The fish is processed into – Fish meal, 80, 000 tons – Fish oil, 18, 000 tons • Current ownership 98. 38% 32
Veststar AS • Medium sized Norwegian producer of farmed salmon – Harvesting 2006 E 12, 000 tons gw – Assumed capacity 25, 000 tons gwt – Expansion towards capacity next few years – All sold through Sea Star and processed at Austevoll Fiskeindustri – 27 licenses on 20 sea locations – Smolt production licenses of up to 8 mill – Production based on 100% marine based fish feed to achieve top quality products 33
Br Birkeland AS • Owned 36% by Austevoll Seafood – First right of refusal to buy remaining shares – Ownership to increase by 4% – Salmon farming 5, 000 tons gw – Two large, modern purse seiners (built 2002 and 2004) – Each with maximum Norwegian pelagic quota (650 “basis tons”) – Three quotas for blue whiting for a total of 33, 000 tons 34
World pelagic fisheries - main countries Source: Kontali • Global catches are stable, but demand is increasing 35
World fish meal production • Austevoll Seafood total fish meal 234’ tons • World production limited by supply of input • Human consumption reduces input supply 36 Source: Kontali
World fish oil production • Austevoll Seafood total fish oil 47’ tons 37 Source: Kontali
Salmon production in Chile • Austevoll Seafood holds 3 licenses for salmon production in Region X, and has applied for 22 licenses in Region XI • Estimated production capacity in first step 8 -10, 000 tons gw • Expected start-up in 2007 • Region XI is the next growth region for Chilean salmon farming • Food. Corp is considering acquisition of farming company to be expanded by transferring licenses currently held Region 10, 90% of Chilean salmon farming Region 11, region for future expansion of Chilean salmon farming 38
Risk factors A number of risk factors may adversely affect the Company. Below is a brief summary of some of the most relevant risk factors. The risks listed below are not exhaustive, and other risks not listed below may also adversely affect the Company. Prospective investors should consider carefully the information listed below and make an independent evaluation before making and investment decision. Market risks • The Company’s financial position and future development depend to a considerable extent on the prices of fish meal and -oil, pelagic fish for human consumption and farmed salmon, which have historically been subject to substantial fluctuations. • Changes in consumer habits and patterns of consumption could affect demand for fish, and this could have a negative impact on the Company’s sales and profitability. • Lower economic growth or a downturn in the Company’s export markets could have a negative effect on the Company’s business and profitability. • Perceived health concerns or food safety issues may negatively impact the reputation of farmed salmon and consequently have a negative impact on the demand. • Increased demands from customers and legislators for internal control, food authority monitoring program and testing in the future may adversely affect the Company’s financial results. Operational risks • The operation of fishing vessels always involves elements of risk with respect to weather conditions, migration patterns of the fish, available fish stock, and the functioning of vessels and equipment. • The production of fish oil, fish meal and canned products is vulnerable to down-time and possible insufficient supply of raw material input. • The salmon farming industry is associated with a high level of biological risk, including diseases and production-related disorders. • Fish farming is operated in open net cage systems located in marine environment and is hence exposed to changing weather conditions as well as pollution of open seas. • The rate at which farmed salmon grows depends, among other things, on weather conditions. Unexpected warm or cold temperatures resulting from annual variations or climate changes can have a significant negative impact on growth rates and feed consumption. • The Company may not be able to insure against all risks on commercially viable terms, and there will always be a risk that certain events may occur for which only partial or no indemnity is payable according to the Company's insurance. • The loss of any of the members of its senior management or other key personnel or the inability to attract a sufficient number of qualified employees could adversely affect its business and results of operations. 39
Risk factors - continued Risk factors relating to the Shares • The Company’s share price may experience substantial volatility in response to, inter alia, variations in operating results, adverse business developments, interest rate changes, changes in financial estimates by securities analysts, matters announced in respect of major customers or competitors or changes to the regulatory environment in which the Company operates. • Pre-emptive rights may not be available to U. S. holders of the Company’s Shares. • It may be difficult for investors based in the United States to enforce civil liabilities predicated on U. S. securities laws against the Company, the Company’s Norwegian affiliates or the Company’s directors and executive officers. • Holders of the Company’s Shares that are registered in a nominee account may not be able to exercise voting rights as readily as shareholders whose shares are registered in their own names with the Norwegian Central Securities Depository. Financial risk factors • A considerable proportion of the Company’s operating revenues and expenses are exposed to fluctuations in various foreign currencies. • A lack of access to external capital or material changes in the terms and conditions relating to the same could limit the Company’s future growth and strategy and have an impact on the Company’s finance costs. Other risks • Monetary trade barriers and other non-monetary barriers could have a material adverse effect on the Company’s business, results of operations and financial condition. • Political events could change the business climate and fishing quota regulation in a way that has a negative impact on the value of the Company’s operations. • Until the company has been approved for listing at the Oslo Stock Exchange, the company’s shares will be traded in the OTC market. Disputes • The Company and its subsidiaries are involved in disputes in the ordinary course of its business activities. The Company’s subsidiary Austral Group SAA (“Austral”) is, as a natural part of its business, involved in various legal disputes including lawsuits in which Austral is named as defendant together with other defendants. Total claims amount to approximately USD 2025 million, but the Company believes that most of these claims are without merit and that the financial outcome of these disputes will not have a material adverse effect on the Company's financial status. However, no assurance can be given with respect to the final outcome of these disputes. 40
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