– Absurd performance – E24

The value of the largest Norwegian salmon companies has fluctuated widely following the proposal for a ground rent tax. Jon Hindar in the fund Summa Equity is concerned about the confidence among foreign investors.

SJØMATINVESTOR Jon Hindar criticizes the process surrounding the ground rent tax, which has caused major stock market fluctuations and could lead to an “extra risk premium” on Norwegian businesses.
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Jon Hindar has extensive experience in the seafood industry, including as head of the farming giant Cermaq. Now he is a partner in private equity-fondetspecial type of fund and companies that primarily invest in companies that are not listed on the stock exchange. These funds are often directly involved in the companies’ development, before they are eventually sold again. Summa Equity, which has around NOK 30 billion under management. The money is invested in various sectors, including seafood.

He reacts in particular to the process surrounding the ground rent proposal, regardless of the content itself.

– It has been completely unreal, and much of the communication, especially from the finance minister, is completely absurd. Either he doesn’t know better or he pretends he doesn’t, and both are equally frightening, Hindar tells E24.

As a PE player, the strategy is to buy first, develop the values ​​in the companies, and then be able to sell at a profit. In this connection, the general perception of the investment climate among investors, perhaps especially the foreign ones, will be very important.

– It is clear that foreign investors will place a higher political stake risk premiumthe extra return you require by taking on risk, that is, an investment must be more profitable for you to be willing to pay for it, or that you pay less, because the risk is greater in Norway given unpredictable changes in Norwegian tax rules. This will definitely affect the value when sold. Therefore is
This is worrying, he says.

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The salmon tax explained from the sea to the fridge

– Like a yo-yo

– How the outcome of ground rent taxation will ultimately be, will have an impact on our investments. But what is perhaps even more important is how we think about future investments, says Hindar.

As of today, the company is “solidly exposed” in the salmon industry related to processing and smolt production.

– We have considerable uninvested capital, and we want to invest more in this sector, and then of course predictability about the framework conditions is important to that extent.

He believes that if this had been more predictable, investors would also have been able to adapt quickly.

– But something else has been shown in the reactions in share prices. I don’t think I’ve ever been involved in anything like it. Leaks from politicians who have talked the shares up and down like a yo-yo – it is completely unjustifiable.

The reason for the fluctuations is several ambiguities linked to the proposal, including which price should be the basis for the tax calculation and which investments the companies can get deductions for. Thus, statements from the politicians will be extra important before the details are clear.

– Scandalous

Hindar fears that, in light of the ground rent proposal, the farming companies will invest less and that it will also affect the supplier industry. Several companies have temporarily put investments on hold pending clarity on the tax situation.

In the last auction of new breeding concessions, the largest also refrained from buying new growth, and the income to the state was thus sharply reduced.

– The mere fact that such an auction was carried out immediately after such an intrusive proposal has been put on the table is frankly scandalous. It weakens the investor’s confidence in investing in the industry, says Hindar.

He does not overlook the fact that the arrangement of the ground rent proposal entails structural changes in the industry, for example what the breeders want to own from slaughterhouses, smolt production and the like.

– So depending on how it plays out, it can provide investment opportunities for actors like us, says Hindar.




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