Canadian land-based salmon farmer Sustainable Blue was placed into receivership as of Thursday.
Nova Scotia Supreme Court Justice, Darlene Jamieson, has appointed Deloitte Restructuring Inc. as the receiver for SFFC Group, which owns Sustainable Blue.
This decision comes after concerns were raised about the financial stability of the company, which operates recirculating aquaculture system (RAS) facility in Nova Scotia, Canada.
The intervention was deemed necessary as the company faced the grim prospect of having to euthanize nearly half a million fish due to its precarious financial situation, according to news outlet AllNovaScotia.com.
Breaking: Receivership for land-based salmon farm backed by Patagonia founder Yvon Chouinard
The appointment of Deloitte Restructuring Inc. as the receiver is aimed at averting this crisis and providing a path forward for Sustainable Blue to address its financial challenges.
The move follows an application by minority shareholders Thane Stevens and Jim Lawley, who have financially supported the company since a critical equipment malfunction last November.
The malfunction involved a filter failure at the facility in Burlington, Hants County, which is responsible for removing dissolved carbon dioxide from the water housing the largest salmon on site. This incident resulted in the death of 96,000 market-ready Atlantic salmon, valued at approximately $5 million, crippling the company’s immediate revenue streams. These salmon were slated for harvest between 28 November 2023, and 31 July, 2024.
Stevens, in an affidavit, said that the incident triggered a severe liquidity crisis for Sustainable Fishing Farming Canada (SFFC), depleting its cash reserves.
“The November 4th Incident has had an immediate and significant impact on Sustainable Fishing Farming Canada’s (SFFC) operations and revenue,” Stevens said. “With much of its revenue producing product lost, SFFC has depleted its cash reserves in order to maintain operations.”
Despite the loss, approximately 480,000 salmon were unaffected by the equipment failure.
To stabilize operations, an additional $8.6 million is needed, with an immediate requirement of $1.52 million. The minority shareholders have already infused $1.5 million in emergency funding and taken over $21 million in loans from the Bank of Nova Scotia to prevent foreclosure.
Deloitte has been appointed as the receiver, with the aim of overseeing a sale and investment solicitation process to ensure the long-term survival of the business.
Sustainable Blue, known for its closed-loop, land-based saltwater fishery that recycles 100 percent of its water, claims to have no wastewater emissions. The facility’s capacity stands at 1,000 tonnes of Atlantic salmon annually.
Bayt Al Qoot UK Ltd., holding a 68% stake in Sustainable Blue, and TCAS Holdings, with a 32% share, are the key shareholders. Bayt Al Qoot UK Ltd.’s owners are based in Morocco and the Middle East and had invested around $28 million US in 2019.
The application for receivership was filed by 4595756 Nova Scotia Limited, controlled by Stevens and Lawley. The company also holds unsecured loans from the Atlantic Canada Opportunities Agency and the Atlantic Fisheries Fund, amounting to $1.38 million and $4 million, respectively.
The case is expected to return to court next month.
