The company had said it would file for liquidation if the plan was not agreed after multiple previous failures.
Chilean salmon farming giant Nova Austral, has achieved a landmark deal, after seven months of a challenging judicial reorganization process.
A judicial reorganization process, often associated with bankruptcy proceedings, is a legal procedure that allows a financially distressed company to restructure its debts and operations under the supervision of a court. This process is designed to help the company avoid liquidation and continue its business operations.
The agreement marks the end of a critical phase for the company, includes a substantial debt restructuring and the transfer of ownership to key creditors.
In a statement issued to local media Nova Austral has described the deal as a rebirth.
“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,” the company wrote.
The salmon producer entered the the reorganization in mid-2023 due to its failure to meet financial obligations and working capital needs after grappling with a debt of approximately $500 million, attributed its financial difficulties to various operational hindrances.
Employing over 800 people directly, and supporting an additional 2,000 jobs indirectly, Nova Austral’s potential collapse posed a significant threat to the regional economy in southern Chile. The company’s efforts to stabilize its finances included negotiations with secured lenders and bondholders, spearheaded by its supporter, the Swedish private equity firm Altor.
Faced with initial restructuring plans that failed to gain creditor support, Nova Austral devised alternative strategies. These included addressing working capital needs, adjusting credit lines, involving bondholders in capital increases, and exploring the sale of the business.
The successful conclusion of the reorganization process not only marks a critical relief for Nova Austral but also for the broader community and industry stakeholders reliant on its operations.
