Pescanova Lenders to Vote on Debt Plan Giving Banks Control

Pescanova SA (PVA) creditors will vote by tomorrow on a restructuring plan giving its biggest banks control of the Spanish fishing company.

Shareholders Damm SA (DMM), the Barcelona-based brewer, and Luxempart SA will withdraw from the restructuring, according to a statement from the company yesterday. Banco Sabadell SA, Banco Popular Espanol SA, CaixaBank SA, NCG Banco SA, Banco Bilbao Vizcaya Argentaria SA, Bankia SA and Unione di Banche Italiane SCPA will control the company under the proposal.

The operator of fish farms and processing plants from Spain to Chile, as well as more than 90 ships, needs to win agreement from more than 50 percent of creditors to avoid entering a liquidation process. Pontevedra, Galicia-based Pescanova had 3.25 billion euros ($4.5 billion) of net debt at the end of 2012, according to a Dec. 10 statement from court-appointed administrator Deloitte LLP.

“It was always going to be either Pescanova with Damm and Luxempart against the banks and if that didn’t work, Pescanova and the banks against Damm and Luxempart,” said Marco Elser, a Rome-based distressed-debt analyst at investment bank Advicorp Plc. “It’s all or nothing for those involved and Damm and Luxempart seem to be coming away with nothing.”

Under the new proposal, lenders will retain 1 billion euros of debt split between 300 million euros of junior facilities, 400 million euros of senior borrowing and a new 300 million-euro tranche of subordinated debt, according to two people familiar with the matter, who asked not to be identified because the negotiations are private.

The subordinated tranche will mature in 20 years and pay annual interest of 1 percent if cash is available. Interest will accrue and be capitalized and paid at maturity if money isn’t available. The seven banks have also guaranteed 125 million euros of super-senior debt, according to the statement.

Auditors found Pescanova had more than 2 billion euros of previously undisclosed debt after it filed for creditor protection in April last year, prompting a fraud investigation.

To contact the reporter on this story: Katie Linsell in Madrid at klinsell@bloomberg.net

To contact the editors responsible for this story: Shelley Smith at ssmith118@bloomberg.net Michael Shanahan

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