Salmon Evolution ASA — Capital/Financing Update 2021

Mar 31, 2021

Salmon Evolution Holding ASA: Signing of definitive agreements for the establishment of K Smart Farming in South Korea

Salmon Evolution Holding ASA: Signing of definitive agreements for the establishment of K Smart Farming in South Korea

Salmon Evolution Holding ASA ("Salmon Evolution" or the "Company", OSE: SALME) -

a leading land-based salmon farming company with its first production facility

under construction at Indre Harøy in western Norway - refers to the stock

exchange notice released on February 26, 2021 regarding the signing of a Joint

Venture Term Sheet with Dongwon Industries Co., Ltd. ("Dongwon"). The term sheet

stated the parties' intention to partner in K Smart Farming Co., Ltd. ("K

Smart"), to form a 49/51 joint venture that will develop, construct, and operate

a land-based salmon farming facility with a production capacity of 20.000 tonnes

live weight ("LWE") of harvestable Atlantic salmon per year in South Korea,

using Salmon Evolution's Hybrid Flow Through System ("HFS") technology.

Salmon Evolution is pleased to inform that the parties now have signed the

definitive agreements for the formalization of the joint venture and the

subscription for 49% of the shares in K Smart. Salmon Evolution's total equity

contribution into K Smart is estimated to NOK 200m on fully funded basis. The

equity contribution from the parties is split in three milestone driven tranches

and Salmon Evolution expects to execute its first tranche of close to NOK 30

million during April 2021. Together with Dongwon's initial equity investment

into K Smart, the proceeds will be used to finance:

· Design and engineering

· Site evaluation and permitting

· Acquisition of an existing and operating smolt facility in Jeongseon of

which closing has already taken place

· General corporate purposes

The key highlights in the agreements and for the partnership are as follows:

· 20,000 tons LWE production facility in South Korea using Salmon Evolution's

HFS technology, developed in two phases of 10,000 tonnes LWE each.

· Ownership through joint venture structure with seafood giant Dongwon where

Salmon Evolution will hold 49% ownership.

· Salmon Evolution's minority position is well protected though a

comprehensive set of corporate governance principles that ensures transparency

and creates mutual influence and balance in the partnership structure.

· Project cost for phase 1 is estimated to about NOK 1.6bn.

· Funding structure of 25% equity and 75% debt, where Dongwon will facilitate

debt financing in K Smart at attractive cost levels.

· Equity contribution from Salmon Evolution is estimated to NOK 200 mill for

the whole project including phase 2 which is planned financed by operating cash

flow and debt.

· Joint effort to maximize the values of K Smart including cooperation to

establish branding and marketing of premium, land-based Atlantic salmon from K

Smart and Salmon Evolution in the Korean market.

Mr Håkon André Berg, CEO of Salmon Evolution comments:

"Following the JV announcement in late February, we are very pleased with being

able to formalize our joint venture with Dongwon in an effective manner. After

seeing the impressive magnitude of Dongwon's operations in South Korea first

-hand and witnessing the Korean authorities' solid backing for the project on

both a national and local level, we are confident that we have found the perfect

partner for our international expansion into one of the most interesting salmon

markets globally. The natural characteristics of the South Korean coastline and

water temperature profile represent an ideal fit for our HFS technology and we

see a huge economic and strategic potential in K Smart in the coming years."

Salmon Evolution is already well underway in the recruitment of key personnel

for the project, which together with resources from the Company's existing

organization will play a key role in K Smart and leveraging the experiences and

knowledge developed through Salmon Evolution's existing project at Indre Harøy.

For further information, contact:

Håkon A. Berg

CEO, Salmon Evolution

+47 411 92 257

Trond Håkon Schaug-Pettersen

CFO, Salmon Evolution

+47 911 91 327

About Salmon Evolution

Salmon Evolution is a Norwegian land-based salmon farming company focused on

extending the ocean's potential by transferring the best preconditions offered

by the sea to farm fish on land through its hybrid flow-through system

technology (HFS). This secures a truly sustainable production process with

controlled and optimal growth conditions and limiting operational and biological

risk.

The company's first production facility is under construction at Indre Harøy,

strategically located on the Norwegian west coast with access to unlimited fresh

seawater, renewable energy, established infrastructure for salmon farming, and

an educated and experienced work force. The entire project is designed for an

annual capacity of approx. 31,500 tonnes HOG.

Salmon Evolution Holding ASA is listed at Euronext Growth under the ticker

SALME.

To learn more, please visit www.salmonevolution.no.

About Dongwon Industries

Dongwon Industries is a leading seafood company based in South Korea. The

company has a top-tier position in the global tuna fishing industry and is the

owner of StarKist, a leading canned tuna company in the US. Dongwon Industries

is also a leading importer of Norwegian Atlantic salmon to South Korea.

Dongwon Industries had USD 2.4 billion in revenues in 2020 with total assets

amounting to USD 2.6 billion. The company is part of the Dongwon Group, a major

South Korean conglomerate with 2019 revenues of USD 6.6 billion and total assets

amounting to USD 4.9 billion.

To learn more, please visit www.dongwon.com/en/business/dongwon-industries.