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“No Cash” – ex boss blames Iceland bank

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21 March 2008

Hans J Marter

PIONEERING cod farming business No Catch went under because its Icelandic backers pulled the plug prematurely, according to the company's former managing director.

Karol Rzepkowski made his allegations in the Norwegian fisheries online news service Intrafish on Wednesday, but cancelled a follow up interview with Shetland News saying he was being gagged.

Mr Rzepkowski said that after the Intrafish article came out, administrators Grant Thornton warned him that he was not allowed to speak to the press. The accountants themselves were unable to confirm this when contacted yesterday (Thursday).

Daniel Smith and Robert Caven, of Grant Thornton, were appointed joint administrators of No Catch on 20 February when the company ran out of cash after just three years, with debts of around £40 million.

The Shetland-based company had pioneered cod farming and had, for a short time, revolutionised the way aquaculture products were marketed, aiming to satisfy 10 per cent of UK demand for cod by 2012 with 30,000 tonnes of fish.

Shetland organic cod sold in ten European countries including major supermarket chains in the UK.

The venture had been financed by private equity firm Milestone and Kaupthing, Singer and Friedlander, a subsidiary of Icelandic bank Kaupthing.

Island sources had been commenting on the lavish management style of No Catch from as early as 2006, and raised doubts about the viability of the company's business model.

The cod farmers very quickly realised that the fish were growing far slower than expected while costs for organic standard fish feed were soaring.

When Mr Rzepkowski and the company's former sales director Mike Lloyd embarked on a planned re-financing exercise in late 2007 they suddenly realised that there was no appetite among lenders to put in more cash.

The managers had hoped to have a profitable cod farming enterprise by 2009.

In the Intrafish article, Kaupthing, Singer and Friedlander strongly rejected any suggestions that Mr Rzepkowski and Mr Lloyd had presented a viable way out of No Catch's cash crisis.

Mr Rzepkowski told Intrafish that No Catch was the first aquaculture victim of the global credit crunch, a claim that was retorted by Kaupthing who said that putting the company into administration was an action of "last resort".

So far, 30 people have lost their jobs in the ongoing crisis, leaving still around 100 employed at the various sea sites, the hatchery, the processing factory and the company's offices.

A spokesman for the administrator said yesterday that discussions with potential buyers were ongoing but due to the Easter weekend no breakthrough was expected before next week.

He was unable to comment on local suggestions that both of Shetland's largest salmon farming companies – Hjaltland Seafarms and Scottish Sea Farms - could be looking into forming a joint venture to take over the No Catch operation.

Most recent update - Tuesday, 06 May 2008 17:07
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