SAN DIEGO, May 31, 2011 /PRNewswire-FirstCall/ -- Umami
Sustainable Seafood Inc. (OTCBB:UMAM) ("Umami" or the "Company"), a
holding company of fish farming operations supplying sashimi-grade
Northern Bluefin Tuna to the global market, announces that the
Company has been actively negotiating with multiple funding sources
to secure short term financing for its seasonal farming.
Upon the closing of approximately $35
million in total net new funding, the Company is expected to
have sufficient funds to complete its planned fishing for the
season. The Company also expects that this $35 million will provide the capital necessary
for budgeted fish farming operations through the next harvest
season, which would commence this coming October.
The Company harvests and sells its Bluefin Tuna product
primarily in the months of October to March, incurring most of its
costs, primarily the feeding of our fish, from April to September.
In this non-harvest period, the Company is relying on external debt
financing to fund its farming operations, mostly from local banks
in Croatia and Mexico, where fish farming operations are
located, and related parties.
The Company has very recently closed new funding of about
$9 million from banks. The Company
also hopes to close a working capital line of $16 million which has been negotiated with a
third party lender soon, subject to adequate amounts of biomass
(live fish being farmed) being available to serve as collateral.
Further, the Company hopes to close a working capital facility of
up to $15 million from a related
party soon, of which approximately $4
million would be used to pay down existing debt.
Until $26 million in loans are
closed, the Company may cover its seasonal cash needs with short
term funding from various sources, as it has done on a regular
basis in the past, in order that ongoing farming operations are
funded as required.
To the extent that some or all remaining $26 million in net new funding does not close,
the Company may raise cash by making alternate borrowing
arrangements or by harvesting and selling or pre-selling some of
its biomass inventory, which currently stands at about 3,600 tons,
valued at over $75 million, given
current market prices.
Additionally, the Company is continuously looking for optimal
sources for long term equity and/or debt for expansion capital,
with emphasis on growing its infrastructure and obtaining new
licenses that will enhance its production capacity.
In announcing these developments, Oli Steindorsson, Chairman and
CEO of Umami, commented: "In spite of the Japan Tsunami on
March 11, a terrible tragedy which
devastated the North East portion of our primary market, we have
made considerable progress in securing funding at a considerably
lower interest cost this year as compared to last year.
"The Japanese market for Bluefin Tuna seems to be at least as
receptive in 2011 as it was in 2010. We have received verbal
requests from clients this year for approximately 4,500 metric tons
of Bluefin. Further, the recent very strong fishing results in
Croatian waters have given us empirical evidence that the quota and
monitoring procedures implemented by ICCAT to ensure the
sustainability of the Bluefin in the Mediterranean are working very
well."
About Umami Sustainable Seafood Inc.
The Company wholly owns and operates Kali Tuna, which is an
established Croatian based aquaculture operation raising Northern
Bluefin Tuna in the Croatian part of the Adriatic Sea and, as of
November 30, 2010, has acquired
99.98% of Baja Aqua Farms, which is an established Mexico based aquaculture operation raising
Northern Bluefin Tuna in the Pacific. The Company has become the
leader in aquaculture for northern bluefin tuna by acquisition and
internal growth. The growth of the Company will be founded on the
sustainable management of resources and economically sound
practices, seeking opportunities resulting from market
consolidation and scientific progress in the industry. We also
intend to continue our research into closed cycle farming
technology for Bluefin tuna which has produced encouraging results.
For more information, please visit http://www.umamiseafood.com.
Notice Regarding Forward Looking Statements
This press release contains projections and forward-looking
statements, as that term is defined in Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Statements in this
press release, which are not purely historical, are forward-looking
statements and can include, without limitation, statements based on
current expectations involving a number of risks and uncertainties
and which are not guarantees of future performance of the Company.
There are numerous risks and uncertainties that could cause actual
results and the Company's plans and objectives to differ materially
from those expressed in the forward-looking information, including
(i) adverse market conditions; (ii) any adverse occurrence with
respect to the farmed seafood industry generally or the businesses
of Kali Tuna and Baja
specifically; and (iii) changes in the regulatory environment.
Actual results and future events could differ materially from those
anticipated in such information. These and all subsequent written
and oral forward-looking information are based on estimates and
opinions of management on the dates they are made and are expressly
qualified in their entirety by this notice. Although the Company
believes that the beliefs, plans, expectations and intentions
contained in this press release are reasonable, there can be no
assurance those beliefs, plans, expectations or intentions will
prove to be accurate. Investors should consult all of the
information set forth herein and should also refer to the risk
factors set forth in the Company's Annual Report on Form 10-K filed
on October 22, 2010, and other
reports filed or to be filed from time-to-time with the Securities
and Exchange Commission.
SOURCE Umami Sustainable Seafood Inc.