Chester Basin Seafoods, a company specializing in silver hake, has been granted a high-interest debtor-in-possession (DIP) loan of $1.1 million to facilitate repairs on two of its vessels. This move comes as part of the company's court-sanctioned restructuring efforts following a series of financial setbacks, including costly vessel repairs that have strained the company's operations.
The Halifax insolvency court approved the loan, provided by the company's founder Jose Teixeira, late last week. This funding is critical for the company's immediate needs, as it will enable the repair work to be completed at the Meteghan shipyard, ensuring that the boats can return to service.
The need for restructuring became acute earlier this month when TD Bank called in loans amounting to $5.5 million. This action pushed Chester Basin into creditor protection, a situation not unfamiliar within the industry, as TD Bank is associated with three seafood firms that faced financial failure in 2023, accumulating debts totaling $39 million.
Despite these challenges, the company was given a deadline of January 21 to address its financial and operational issues, which were brought to a head after the vessel Seaman's Toy 1 ran aground and two others experienced engine failures. At a legal hearing on the Friday before today, TD Bank raised concerns about Chester Basin's depleted working capital and the state of its fleet, though it did not accuse the company of any misconduct.
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