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Pescanova at Risk of Losing Investors as Board Dispute Surfaces

Pescanova SA (PVA), Europe’s second- largest fish processor, is facing a hurdle from two shareholders as it tries to continue with a debt restructuring policy amid an investigation by regulators.

Board directors Jose Carceller, the brother of the chairman of Spanish brewer Damm, and Francois Tesch, who represents Luxempart SA (LXMP), didn’t back the company’s plan to restructure debt, they said in a statement today. Pontevedra, northern Spain-based Pescanova said the board unanimously agreed yesterday to continue debt talks.

Damm and Luxempart hold 6.18 percent and 5.84 percent of Pescanova, respectively, according to regulatory filings. Pescanova Chairman Manuel Fernandez de Sousa-Faro holds about 14 percent.

“We don’t question Pescanova’s chairman, but we feel the strategy of the company isn’t the most appropriate in order to solve the company’s problems, and Damm isn’t guilty of that situation,” Izaskun Martinez, a Barcelona-based spokeswoman for Damm, said in a telephone interview today.

Pescanova’s board approved a plan last night for “restructuring of its financial policy,” and said it analyzed with auditors some discrepancies involving debt. The company said production is operating normally in Spain and abroad.

On March 12, the company said it saw discrepancies between its accounting and banking debt figures that could be “significant.” Consultant BDO Auditores will help evaluate the matter as soon as possible, it said.

Meeting Request

“We requested an extraordinary board meeting along with other board members because we needed information that shed some light on what was really going on,” Damm spokeswoman Martinez said. “We are both surprised and concerned that the company isn’t transparent and it communicates with board members and investors only through regulatory statements.”

The company’s 160 million euros ($209 million) of 8.75 percent convertible bonds due 2019 were quoted at 36 cents on the euro by KNG Securities LLP in London, a 10-cent decline from levels on March 4. Its two other convertible securities, due 2017 and 2015, were at similar levels, KNG said.

“Investors have lost trust in the company and it’s going to take a long time for them to come back,” said Arancha Pineiro, a Madrid-based analyst at Ahorro Corp. Financiera in Madrid. “When you look at the stock you can tell how unhappy investors are. We can only wait and see what happens as the company is very opaque.”

Share Suspension

Pescanova shares remain suspended by stock market regulator CNMV. The stock lost 58 percent this year before trading was halted March 12.

The regulator said March 11 it will investigate Pescanova to determine whether there are signs of improper trading by the company, its management or third parties. CNMV has requested that the company submit earnings for the second half of 2012 as soon as possible as well as additional information including on assets and debt, it said.

Representatives of Luxempart and Pescanova couldn’t immediately be reached by phone.

Pescanova, which has about 10,000 employees and a presence in more than 20 countries, counts more than 100 vessels and almost 50 fish-farming plants among its assets, according to the company’s Website.

Pescanova’s estimated debt at group level is 2.5 billion euros, Expansion reported March 13, citing Bank of Spain data.

For Related News and Information:

To contact the reporter on this story: Manuel Baigorri in Madrid at mbaigorri@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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