Chilean court of appeals suspends Nova Austral bankruptcy proceedings

A Nova Austral farm
A Nova Austral farm | Photo courtesy of Nova Austral
4 Min

A Chilean court of appeals has decided to suspend the liquidation process of salmon-farming firm Nova Austral after Cargill-owned feed supplier Ewos filed an appeal against the salmon farmer’s bankruptcy proceedings.

On 14 May, Judge Pablo Aceituno issued a resolution to liquidate Nova Austral, based on the complaints presented by two of the salmon farmer’s creditors – Nutreco and Salmonera Dalcahue Limitada – which alleged unequal and illegal treatment in the financial reorganization process Nova Austral approved in January 2024.

Now, with the suspension, the salmon company – which employs more than 3,000 people directly and indirectly – has room to breathe, but Nutreco has filed a brief requesting that the appeal be dismissed, arguing that Ewos, which supplies feed to Nova Austral and is also a creditor of the beleaguered firm, does not have the legal standing to appeal the ruling, La Tercera reported.

Besides Ewos’s appeal, Nova Austral itself had also filed an appeal against its liquidation, saying the court’s sentence “incurs serious errors” in siding with the plaintiffs’ complaint. The reorganization process had been approved under all legal requirements, with the agreement of more than two-thirds of those affected, it said.

Nova Austal’s reorganization aimed to ensure operational continuity for the firm, which has posted continuous periods of financial losses and suffered numerous fines from the Chilean government for environmental infractions.

The company has said that its performance has been affected by a series of factors that have prevented it from performing its normal business, particularly the steep environmental sanctions.

Specifically, Nova Austral came under investigation in 2019 from Chile’s National Fisheries and Aquaculture Service (Sernapesca) for underreporting mortalities – an infraction which led to criminal charges and fines. It has been in regulatory hot water and financial straits since then. In April 2024, a Chilean court of appeals confirmed the salmon farmer must pay a fine of CLP 1.02 billion (USD 1.06 million, EUR 992,000) for other environmental infractions.

The three largest creditors of Nova Austral – reportedly more than USD 550 million (EUR 516 million) in debt – are Nordic Trustee, which has invested USD 415 million (EUR 389 million) in the company, followed by DNB Bank at USD 69 million (EUR 64.7 million) and Skretting at USD 23 million (EUR 21.6 million). 

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