Nova Star Cruises bankrupted

Nova Star vesselNova Star Cruises filed for bankruptcy, as the company suffered from high debts and inability to settle the next due payments. The start-up company, which was established two years ago, accounted net debts of 15.1 million USD, due to permanently decreasing number of passengers and canceled contracts. The province of Nova Scotia did not renewed contract for ferry service between Yarmouth, Nova Scotia and Portland, Maine for the season 2016, which additionally decreased the liquidity of the company and remained its vessel unemployed. Nova Star Cruises filled bankruptcy statement in Office of the Superintendent of Bankruptcy Canada and the meeting of creditors will be held on May 4.

During the both years of operations the passenger counts fell well below their projection targets, which was ion the heart of bankruptcy of the company. The federal court in Portland ordered the arrest of the ferry Nova Star, due to complaints by some of the creditors in Maine. The company net debts exceeded 15.1 million USD, while the assets were not more than 100,000 USD. The company stopped payment of services and contractors, which suspended operations.

Nova Star Cruises is a ferry company operating in Nova Scotia and Maine. Their ship, MV Nova Star, is a Ropax cruiseferry operating seasonally on the Gulf of Maine between Portland, Maine and Yarmouth, Nova Scotia. The company is joint venture by Quest Navigation of Eliot, Maine and Singapore conglomerate ST Marine. It was awarded the contract to operate the route in November 2013, when the Nova Scotia government agreed to issue 21 million USD in forgivable loans to the company over seven years. During the two years of operations the company received more than 40 million USD from creditors and operations.