Purecod has entered bankruptcy proceedings and is in the middle of a major restructuring, according to the company’s CEO, Eirik Jørs.
Founded in 2020, Sykkylven, Norway-based Purecod was granted a permit to farm a maximum of 3,120 metric tons standing biomass of Atlantic cod at sea in closed pens at Røneset, Storfjorden, Norway from the Møre and Romsdal county municipality in March 2022. Its permits remain active, though the company never began farming fish.
Now, the company is four weeks into the first phase of what Jørs described as a two-step bankruptcy process.
“We are exploring a legal process in Norway that allows for the possibility of regaining control of the estate contingent on achieving agreements with the company’s creditors," Jørs told SeafoodSource. "We are also actively working on finalizing changes in ownership, a process that has been in progress for some time and continues to develop. Ongoing changes in ownership are expected to significantly strengthen the company through the new shareholder structure. The ball is moving. We are working to try and resolve the issues and we are in the midst of that process.”
Jørs blamed Purecod’s financial difficulty on the Norwegian government’s 25 percent tax on aquaculture operations, which was implemented in May 2023. Jørs declined to provide additional information regarding the company’s financial status or reasons for the bankruptcy filing.
"Unfortunately, this has resulted in the company's intended capitalization not being able to proceed as planned," Jørs said. "Based on the processes we are engaged in, we still have great confidence that Purecod's plans will be successful."
Purecod’s website appeared to be down as of Monday, 18 September. Asked whether the company remained a going concern, Jørs said it was.
“Purecod is still viable and functional. It's ready to begin operations,” Jørs said. “We're in the midst of process to resolve our difficulties, so it would be premature for me to state too much right now.”
Jørs confirmed the company’s founder, Mikael Rønes, currently holds no formal position with the company, or at aquaculture investment vehicle Blue Future, aquatech firm Closedpen AS, or American Aquafarms, which has been partially liquidated after failing in its attempt to build a 30,000-MT closed-pen Atlantic salmon farm in the U.S. state of Maine. Jørs said he has taken over as CEO of each of those entities.
‘The change was made a year ago. We felt there was a need for more expansion of the board in a different direction,” Jørs said. “Mikael is an entrepreneur and very good creating ideas, but others might have more to contribute in running the companies.”
Rønes, who was previously convicted of multiple counts of fraud in Norway, for which he spent more than two years in prison and was forced to pay restitution of NOK 15 million (USD 1.7 million, EUR 1.4 million), declined an interview request. In October 2022, Rønes ran into additional legal problems when he was ordered to surrender NOK 20 million (USD 1.8 million, EUR 1.7 million) in assets to investors in Blue Future and Purecod, according to DN. He also came to a separate agreement to repay Norwegian billionaire Helge Gåsø NOK 26 million (USD 2.4 million, EUR 2.3 million) lent to Rønes’s company, Global AS, after Gåsø pursued the matter in court.
"I would like to emphasize that Purecod’s challenges stem from recent external factors like new industry taxes that undermined access to investor capital needed for the startup’s launch. While concerning, Rønes past legal issues are not the core reason behind Purecod’s current financial struggles and bankruptcy filing," Jørs said.
Jørs said he hoped to have more information available about the future plans for Purecod and his other companies “not too far down the road.”
“It’s an ongoing process, and we're working on several aspects of the ownership structure as well as the future of the companies and it's all connected in several different processes,” he said. “Purecod needs restructuring. It needs access to finance. We are working on that together with partners. There will be a different company structure coming out of this.”
Photo courtesy of American Aquafarms
