Dolphin Cove Stock Price Dives Amid News of Parent Company’s Bankruptcy Filings

  • News that Controladora Dolphin S.A. de C.V (Dolphin Discovery Group) – the owner of local tourist attraction, Dolphin Cove (DCOVE) and other dolphinariums[1] – filed for bankruptcy sent DCOVE’s stock on the Jamaica Stock Exchange (JSE) diving this week.
  • The dolphinariums of Eduardo Albor, who is the president, is said to owe more than US$200Mn in liabilities to funds associated with Prudential Insurance, Cigna Insurance and Life Insurance. According to a report by El Heraldo de Mexico, Gerardo Badín, Mexican Insolvency Conciliator, was appointed as the inspector/conciliador to oversee the bankruptcy proceedings.
  • The group of dolphinariums is considered one of the largest in the world. Still, it has been in decline, apparently due to the termination of the contract of the Miami Seaquarium dolphinarium in April 2024 and subsequent eviction proceedings initiated by Miami-Dade County. This followed concerns from the United States Department of Agriculture over the mistreatment of animals and repeated violations of animal welfare by the Miami Seaquarium.
  • Following the news, DCOVE’s shares on the JSE sank by 29.1% to $15.18 between Tuesday and Wednesday, wiping out J$1.73Bn (US$10.95Mn) in market capitalisation after the reports emerged about its Parent Company’s filings.
  • Under Mexican law, a "debt restructuring" process, also known as a "concurso mercantil," would allow a company like Dolphin Discovery to negotiate with its creditors to extend the repayment period of its debts, allowing it to continue operations while negotiating payment terms with creditors.
  • That said, the Dolphin Company has since shared a statement clarifying that Controladora has filed to restructure its financial liabilities under the protection and supervision of a Mexican court specialised in financial debt restructuring. The report expressed that this process is not considered a bankruptcy filing but rather a mechanism provided by Mexican laws to facilitate an agreement with the main creditors, protecting the interests of other suppliers, employees, and customers, as well as the company’s assets for its benefit. The company also expressed that it will define the best strategies to facilitate the fulfilment of its obligations in the medium and long term, while also continuing its development and expansion.

(Sources: Reportur, NBC Miami, NCBCM Research)