Chilean salmon farmer in debt default

The large Chilean salmon company Nova Austral has admitted it is in debt default after grappling with various financial problems.

So far, a plea for patience from bondholders has met with a cool response.

Although the company is based in Chile, its bonds are listed on the Oslo Stock Exchange. Nova Austral said in a Stock Exchange announcement at the weekend that it is facing  operational challenges and liquidity constraints. In an attempt to address its working capital requirements, the company has discussed carrying out a comprehensive financial restructuring with its secured lenders and a group of its largest bondholders.

The statement continued: “During this period the company has also been granted certain waivers of payments of interest and instalments due under its super senior revolving credit facility and the loan facility to its subsidiary, Piscicultura Tierra Del Fuego SA.

“The discussions with the creditors are still continuing, but as the secured lenders have not been willing to extend such waivers, the company and Piscicultura are in default under the facilities agreements.

“The secured lenders have not yet declared any part of the facilities to be due for immediate payment, but they have reserved all rights to take action at any time without any further grace periods.”

It added: “The events of default under the company’s super senior revolving credit agreement have triggered a cross default under the bonds, and the company has informed Nordic Trustee AS in its capacity as bond trustee for the Bonds accordingly.”

Nova Austral said it would furnish further information to bondholders when it became available. The company is owned by the Swedish private equity fund Altor and operates in southern Chile close to Chilean Antarctica, one of the world’s remotest salmon farming areas. Its fish is marketed on a global basis to retailers, hotels and restaurants.