Pescanova Restructuring Proposes Creditor Loss of Up to 97.5%

Pescanova SA (PVA), the Spanish fishing company whose former board hid more than 2 billion euros ($2.7 billion) of debt, is asking lenders to take nominal losses of as much as 97.5 percent as part of restructuring proposals.

Shareholders will get 4.99 percent of a new company and Damm SA (DMM), the Spanish brewer, and Luxempart SA will become Pescanova’s industrial partner, according to a regulatory filing. The company will get as much as 150 million euros in capital and long-term financing under the plans presented to a Spanish court yesterday.

The operator of fish farms and processing plants from Spain to Chile, as well as more than 90 ships, must win agreement from more than 50 percent of creditors by April 1 to carry out the restructuring plan and avoid liquidation. Auditors found Pescanova had more than double the amount of debt previously reported after it filed for creditor protection in April, prompting a fraud investigation by a Spanish court.

Pescanova had 3.25 billion euros of net debt at the end of 2012, according to a Dec. 10 statement by the company’s court-appointed administrator Deloitte LLP. First-half results from 2012 reported financial debt was 968 million euros at the end of June.

Debt, excluding international units, will be cut to 812.5 million euros after the restructuring.

Founded in 1960, Pescanova developed the world’s first fishing boat equipped with a freezer, allowing the company’s boats to trawl waters around Brazil, Uruguay and Argentina. The company expanded to operate fisheries and processing facilities from Nicaragua to Japan and Namibia.

Shareholder Bid

Damm owns 6.2 percent of the existing company, while Luxempart has a 5.8 percent stake, according to company filings. The shareholders had initially bid to restructure Pescanova in a consortium with KKR & Co. and Ergon Capital Partners SA and asked lenders in December to accept losses of as much as 90 percent.

Pescanova borrowed from more than 100 lenders, including Banco Sabadell SA, Banco Popular Espanol SA, CaixaBank SA, Banco Bilbao Vizcaya Argentaria SA, Banco Santander SA, Bankia SA and NCG Banco SA, according to a list of creditors prepared by Deloitte.

A rival group of investors represented by Spain’s former defense minister Eduardo Serra and including BlueCrest Capital Management decided not to submit a restructuring plan, according to a spokesman for the consortium based in Madrid.

The group initially proposed investing 300 million euros of equity and didn’t submit a plan because they couldn’t carry out satisfactory due diligence before yesterday’s deadline, the spokesman said.

To contact the reporter on this story: Katie Linsell in Madrid at

To contact the editor responsible for this story: Shelley Smith at

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