Banks headed by Banco de Sabadell SA (SAB) and NCG Banco SA will be offered an equity stake in exchange for accepting the writedown, Juan Manuel Urgoiti, the preferred candidate of Corp. Economica Damm SA and Luxempart SA to become non-executive chairman of Pescanova, said in an interview. Shareholders are scheduled to vote on the proposal at a meeting on Sept. 12. Urgoiti said he has been pledged more than 30 percent of investors’ votes.
“It’s time for great sacrifices and those sacrifices have to be shared out equally,” Urgoiti said. “But it also has to be done in a way that generates confidence in the market.”
Pescanova sought protection from its creditors after uncovering more than 2 billion euros ($2.7 billion) of debt in off balance-sheet financing units. Former Chairman Manuel Fernandez de Sousa-Faro is being investigated for fraud over the losses and was this month ordered to provide guarantees worth about 180 million euros to cover his liabilities.
Deloitte, Pescanova’s court-appointed administrator, will recommend that the company be restructured rather than liquidated because its underlying business remains profitable, Urgoiti said. Deloitte is due to publish its report imminently, he said.
Glass Lewis & Co and ISS Proxy Advisory Services, which advise institutional investors on how to vote their shares, also recommend endorsing Urgoiti as chairman.
Urgoiti said investors would have less confidence in Pescanova if the banks wiped out the existing investors and took over all of the company because that would create a conflict with the banks figuring as both equity and debt investors.
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