Financially distraught Nova Austral floats three options for restructuring

Creditors of the troubled salmon-farming firm Nova Austral have decided to push back a vote on a proposed restructuring until 9 November, after the beleaguered Punta Arenas, Chile-based company – reportedly USD 560 million (EUR 530 million) in debt – proposed three different reorganization options.

Nova Austral has been under intense public scrutiny from Chile’s National Fisheries and Aquaculture Service (Sernapesca), which began investigating the company’s alleged underreporting of mortalities in 2019. That led to criminal charges against the company, resulting in fines for reported inadequate mortality and waste management. Further, the Superintendency of the Environment (SMA) revoked three concessions from Nova Austral due to overproduction, and the State Defense Council (CDE) accused the company of providing false information to the treasury and abusing the Navarino Law, which provides benefits to companies that set up and operate in the Magallanes region. Since then, the regulator has particularly targeted the company by levying consistent fines and implementing regular production limitations.

Ever since, Nova Austral has been in a near-constant state of financial turmoil.

To date, financial creditors have been unable to agree on a consensual restructuring proposal, the company said in a statement via the Oslo Børs. Amid numerous sanctions from Chile’s environmental regulator and attempts to stave off bankruptcy, the company’s first attempt at restructuring failed. Judicial reorganization proceedings began in June, and a Chilean court issued the reorganization resolution in July.

Nova Austral presented its first draft of the restructuring plan at the beginning of August, which includes three different reorganization options. The first entails a ... 

Photo courtesy of Nova Austral