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Gray Aqua Group, whose operations contributed to tremendous economic gains and growth in the region, filed for bankruptcy owing $40 million
BY Food in Canada magazine staff ON September 04, 2013 12:18pm
Northampton, N.B. – An New Brunswick aquaculture company, with operations in Newfoundland, has filed for bankruptcy, owing creditors almost $40 million.
Gray Aqua Group, reports TheCoaster.ca, filed for bankruptcy on Aug. 21.
Reports say the company dealt with three separate cases of infectious salmon anemia (ISA) over the past year and a half. Resulting culls, which the Canadian Food Inspection Agency (CFIA) ordered, led to the loss of more than a million fish.
The director of the Newfoundland Aquaculture Industry Association, Cyr Couturier, told TheTelegram.com, that the company lost three of its farm sites as a result of ISA. And while it did receive compensation, “it’s never enough to recover or hasn’t been for them.”
There are about a dozen creditors, reports TheTelegram.com, ranging from $24.9 million to bank HSBC to $323.29 owed to New Brunswick company Pennfield Hydraulics.
The CBC.ca reports that Gray Aqua also owes – and has been ordered by the courts to repay – Corey Nutrition just under $650,000 for fish feed.
Newfoundland and Labrador has a $3.8 million equity share in Gray Aqua. Derrick Dalley, minister of Fisheries and Aquaculture, told the CBC.ca that it’s too soon to say what will happen to that investment. More details will be known once the company goes through the standard 30-day restructuring process.
Dalley also explained that while aquaculture companies are compensated for fish stock losses, the costs associated with growing the fish and the expected profits that would have been realized by selling them once they reached full maturity are not covered.
“A lot of the expense of growing the fish is on the front end,” Dalley told CBC.ca. “And you don’t get covered on the front end unless fish are able to grow to full maturity.
“In this case they weren’t at full maturity in part of the depopulation, so as a result of that it ended up being a loss in the compensation.”