Gray Aqua files for bankruptcy protection

Daniel
Daniel MacEachern
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Pictured (from left) Dr. Daryl Whelan, Director of Aquatic Animal Health in St. Alban’s; Fisheries Minister Derrick Dalley; and Tim Gray, President of Gray Aqua Group Ltd., tour the province's Centre for Aquatic Health and Development in St. Alban’s in this file photo.

Aquaculture company Gray Aqua has filed for bankruptcy protection, owing nearly $40 million to creditors, including taxpayers.

Documents obtained by the Telegram show that the New Brunswick-based company, with operations in Newfoundland, filed a notice of intention Aug. 21 under the Bankruptcy and Insolvency Act to make a proposal to its creditors, which number in the dozens — ranging from $24.9 million to bank HSBC to $323.29 owed to New Brunswick company Pennfield Hydraulics.

Gray Aqua has been beset by three separate cases of infectious salmon anemia over the past 14 months, resulting in culls of more than a million fish ordered by the Canadian Food Inspection Agency — a major setback for the company, according to the head of the provincial aquaculture industry association.

“They lost three of their farm sites due to ISA, and there’s some public compensation for that, but it’s never enough to recover, or hasn’t been for them,” said Cyr Couturier, executive director of the Newfoundland Aquaculture Industry Association. “That amount sometimes covers your operating costs, sometimes it doesn’t. But most of the time it doesn’t, and I think in this case that’s what will happen with Gray, where some of the fish were young, and most of the production of salmon is front-loaded, so your costs are 50 or 60 per cent up front and then by the time they reach market value, then you start making money. But in the case of small fish, you lose money.”

Fisheries and Aquaculture Minister Derrick Dalley called it a difficult situation for Gray Aqua.

“But the industry as a whole, it’s been a very strong industry with tremendous growth opportunities,” he said. “From our perspective, the industry is strong and the outlook is positive. It’s just a very unfortunate and difficult situation that Gray finds themselves in right now.”

dmaceachern@thetelegram.com, Twitter: @TelegramDaniel

Organizations: HSBC, Canadian Food Inspection Agency, Newfoundland Aquaculture Industry Association

Geographic location: Newfoundland, New Brunswick

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Recent comments

  • Mark
    August 28, 2013 - 21:58

    This minister is out of his league here. And it shows.

  • Another PC Financial Flop
    August 28, 2013 - 16:06

    More NL taxpayer dollars given to another out of province company with failed results.

  • david
    August 28, 2013 - 14:53

    Yes, the 'industry' is a panacea of opportunity...it's just that no one can succeed or make any money at it. Keep tossing in the government loans and the government-guaranteed loans, keep getting re-elected, and keep cutting the ribbons. Big success. Cheeeeeeese!