Pescanova SA, the Spanish fishing company trying to avoid liquidation, offered creditors a larger equity stake in exchange for additional capital under a modified restructuring proposal.
The plan proposed by shareholders Damm SA, the Spanish brewer, and Luxempart SA, allows lenders up to 65 percent of shares in a restructured business, up from 35 percent in the original proposal published March 4, according to a filing yesterday. The share sale seeks as much as 62.5 million euros ($86.2 million) in capital, with most lenders having to accept losses of 60 percent to 90 percent on their debt.
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 15 to carry out the restructuring plan and avoid liquidation. Auditors found Pescanova had more than 2 billion euros of previously undisclosed debt after it filed for creditor protection in April, prompting a fraud investigation.
The restructuring proposal groups all of Pescanova’s Spanish units apart from Novapesca Trading into a new company, according to the March 4 regulatory filing. It excludes international units and aims to cut debt to 812.5 million euros.
The debt will be split between senior and junior tranches held by lenders totaling 700 million euros, while 112.5 million euros of super senior debt will be held by Damm, Luxempart and other creditors, according to the March 4 filing.
Pescanova’s principal creditor banks are meeting today with advisers to discuss the revised plan, according to a person with knowledge of the negotiations, who asked not to be identified because they’re private.
Pontevedra, Galicia-based Pescanova borrowed from more than 100 lenders, including Banco Sabadell SA, Banco Popular Espanol SA, CaixaBank SA, Banco Bilbao Vizcaya Argentaria SA, Bankia SA, NCG Banco SA and Unione di Banche Italiane SCPA, according to a list of creditors prepared by the company’s court-appointed administrator Deloitte LLP.
The proposal maintains the same level of haircuts, the company said in the filing. In order to restructure Pescanova, its units must be also restructured, or the company would end up breaching the terms of a creditor agreement, the company said in the statement.
Pescanova’s Spanish units will seek creditor protection by April 10 as part of the restructuring plan, according to a letter from Deloitte included in the revised proposal. Pescanova’s units Pescanova Bajamar Septima SA and Pescanova Alimentacion SA sought preliminary creditor protection yesterday, the company said in a regulatory filing today.
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.
Pescanova had 3.25 billion euros of net debt at the end of 2012, according to a Dec. 10 statement by Deloitte. First-half results from 2012 reported financial debt was 968 million euros at the end of June.