Pescanova SA, 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, the Spanish brewer, and Luxempart SA will become Pescanova’s industrial partners, according to a regulatory filing. The new 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.
The restructuring plan, proposed by Damm and Luxempart, groups all Pescanova’s Spanish units apart from Novapesca Trading into a new company, according to the statement. It excludes international units and aims to cut debt to 812.5 million euros.
Losses suffered by creditors will depend on their individual positions and the capital and debt instruments they’re offered as compensation under the proposals, according to the statement. Average losses may be about 60 percent to 90 percent, the company said.
In the new company, Damm and Luxempart will together hold a 30 percent stake, while 30.4 percent will be available to other shareholders and 34.6 percent to creditors, according to the statement.
Pontevedra, Galicia-based 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.
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.
Damm owns 6.2 percent of the existing company, while Luxempart has a 5.8 percent stake, according to company filings.
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.