Nova Austral bankruptcy threat finally lifted

The troubled Chilean salmon farmer Nova Austral appears to have been given the go-ahead to continue with its re-organisation.

Following a new appeal by the company and other organisations, a court in the south of the country has permanently reversed a bankruptcy order. A temporary appeal was allowed in May.

This means a long running saga, and a series of delays which saw the business come close to being wound up or sold, should at last be over.

Despite its South American area of operation, Nova Austral is a Norwegian owned business and quoted on the Oslo Stock Exchange although the business was removed from normal trading a few months ago following a rules breach.

The company was this week subsequently placed in a “recovery box” which is a special compartment where the Oslo Børs can place securities and the Issuer is subject to circumstances that make pricing of the securities particularly uncertain.

Nova Austral is said to have debts totalling around US $550 million (£430m) although the figure has been challenged.

On a day to day trading basis, the company’s operation appears  reasonably healthy. It posted a modest first quarter profit of US $400,000  (£312,000) following a period of previous quarterly losses. Revenues during the period totalled US $28.4 (£22m) million.

The business was threatened with closure on a number of occasions last year which would have had a devastating impact on the area of southern Chile in which it operates.

The trade unions pleaded with the government and creditors not to let this happen although in the end government intervention was unnecessary and the company found its own way out of further trouble.