Gray Aqua files for bankruptcy protection

Daniel MacEachern dmaceachern@thetelegram.com
Published on August 28, 2013
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 today. Dalley announced details of a $5 million investment in Gray Aqua Group Ltd. to expand salmon farming efforts in the Coast of Bays region. — provincial government 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