Pescanova's facilities in Chapela. (Photo: Pescanova)

'Express insolvency' requested for Pescanova’s Spanish subsidiaries

The group formed by the brewery Damm, Luxempart and creditor banks filed a plan designed to prevent the liquidation of the Galician multinational firm Pescanova, whose debt amounts to about EUR 3,600 million, at the Commercial Court number 1 of Pontevedra.

Proponents of the proposal consider it is necessary to solve the indebtedness situation of the Spanish subsidiaries in the country through an insolvency proceeding and by merging with the parent firm to later become independent.

The written plan points out that "a great part of the money flows perceived by Pescanova comes from their subsidiaries, and if these are also highly indebted, it will be difficult for them not only to obtain funds from the parent firm in order to fulfill the agreement, but also to survive."

The bidders warn that "the alternative would be the liquidation of Pescanova and of the group," reported the newspaper La Voz de Galicia.

The proposed agreement sent on Monday to the National Securities of the Market Commission (CNMV) provides for the injection of up to EUR 150 million, including capital and long-term financing process.

It also includes a corporate reorganization, with the request for express insolvency proceedings for the subsidiaries located in Spain.

The offer includes a remaining debt amounting to EUR 812.5 million after the restructure, excluding the debts of foreign subsidiaries, which will have to be settled by their own means.

Out of the total injection of funds, 70 per cent -- about EUR 105 million -- will be provided by the creditor banks and the remaining 30 per cent (EUR 45 million) by the consortium composed by the brewer from Catalonia and by Luxempart.

According to this proposal, banks are to experience nominal reductions amounting to 90 per cent and 97.5 per cent, depending on the chosen alternative while for Pescanova the effective reduction will range between 60 per cent and 90 per cent.

Moreover, a segregation of the entire business will take place in favor of a new entity: New Pescanova. It will contain the entire post-creditors’ meeting liabilities and will group the shares in the new company Pescanova Spain, the newspaper El Pais reported.

Pescanova pointed out in a statement that "in this way the favorable situation is confirmed to reach an agreement with creditors to obtain the support needed to permanently eliminate the liquidation risk that has been affecting the Spanish multinational fishing firm for more than one year."

Besides, the firm expressed thanks for the "constructive effort that has presided over the dialogue process between creditor banks and those investors who have concurred in the offer, realizing that over corporate interests the company’s benefit has prevailed apart from the value of the brand and the concern for the future of the professionals who work in it," reported Cinco Dias.

According to this newspaper, the proposal has a representative support that is inferior to 45 per cent of the ordinary loans. And for the agreement to go ahead and for the firm to avoid liquidation, it must have the support of over 50 per cent of the ordinary loans.

Furthermore, the Minister of Economy and Industry of Galicia, Francisco Conde, received the submission of the proposal with "prudence" and "optimism," believing that a "way forward" opens for Pescanova.

Pescanova’s main creditor banks are Sabadell (EUR 226.7 million), Popular (EUR 181.9 million), CaixaBank (EUR 177.7 million), Novagalicia (EUR 147.2 million), Bankia (EUR 106 million) and BBVA (EUR 104.6 million).

Related article:

- A new Pescanova firm to be born in April?

By Analia Murias
editorial@seafood.media
www.seafood.media

Address:	Calle José Fernández López, s/n
City:	Chapela - Redondela
State/ZIP:	Pontevedra, Galicia (36320)
Country:	Spain
Phone:	+34 986 818 100
Fax:	+34 986 818 220
E-Mail:	info@pescanova.es
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