Chile’s Nova Austral saved from liquidation

Chilean salmon farmer Nova Austral has been saved from the immediate threat of liquidation.

The long-running saga came to an end last night after the bondholders voted in support of a reorganisation agreement drawn up late last year.

An announcement on the Oslo Stock Exchange said: “Following the Issuer’s presentation of the Reorganisation Agreement, Nordic Trustee AS has today published a notice to a written resolution at the request of bondholders representing more than 10% of the bonds.”

Nova Austral, which is believed to owe more than US $500m (£395m), told the Chilean media: “This restructuring is more than a financial reset; it’s the revival of our company. We’re ready to forge ahead, making significant contributions to the economy and the community of Porvenir, while upholding our dedication to producing high-quality, eco-friendly salmon.”

Nova Austral would have been forced into liquidation or a sale if the proposals had not been agreed and for a time it looked as if that might happen following several meetings in which the parties failed to come to an agreement.

The news will certainly come as a relief to the hundreds of people in southern Chile who work directly and indirectly for the company. Nova Austral is situated in an area of the country where employment opportunities are limited.

Part of the agreement includes commitments:

• To restructure the company’s debt through the granting of new conditions for the payment of the remaining credits subject to the reorganisation agreement;
• To search for investors who are able to provide working capital; and
• To preserve the company’s line of business.

The company believes many of its problems were not of its own making and came from outside the business. Now, Nova Austral has the considerable  task of restructuring, reassuring existing customers and finding new business.