Pescanova Shares Fall 60% as Company Negotiates Refinancing

Pescanova SA, Europe’s second-biggest fish processor, plunged 60 percent after it started the initial phase of seeking creditors’ protection and delayed results pending asset sales and a debt renegotiation.

The stock tumbled to 6.96 euros in Madrid, or 60 percent lower than the previous close at 17.40 euros on Feb. 28, a day before it was suspended from trading by stock market regulator CNMV. The one-day decline was the most since at least 1994, according to data compiled by Bloomberg.

Pescanova, based in Pontevedra, northwest Spain, said last week it would not provide financial results for 2012 until it proceeds with either the “certainty” of a sale of some salmon-farming assets or the renegotiation of its debt. The company also said it entered a preliminary phase of seeking protection from creditors.

“This was totally unexpected,” Joao Safara Silva, a Madrid-based analyst at Banco BPI, said in a telephone interview today. “Like many other Spanish firms, Pescanova had debt-related problems, but it was still regarded as a solid company. It should have been able to avoid this situation.”

The company’s 160 million euros ($208 million) of 8.75 percent convertible bonds due 2019 dropped and were quoted at 46 cents on the euro by KNG Securities LLP in London. Its two other convertible securities, due 2017 and 2015, were quoted at similar levels, KNG said.

Significant Development

“The company continues to carry out its regular activities and it will announce any significant development about the debt and asset-sale negotiations through the stock-market regulator,” Angel Matamoro, general manager at Pescanova Alimentacion, the unit that sells products in Spain, said in a phone interview today.

Matamoro declined to comment on when the company will agree new terms on its debt or sell assets. He also wouldn’t say when Pescanova will release its earnings.

Pescanova shares had gained 24 percent in the year through Feb. 28, valuing the company at 500 million euros. As of today, Pescanova has fallen 50 percent this year, valuing the business at 200 million euros. The benchmark IBEX 35 index has risen 1 percent in the year to date.

There are many more sellers than buyers of the stock and it is difficult to match buyers to sellers’ prices, according to Pablo Malumbres, a spokesman at Bolsas & Mercados Espanoles SA, the operator of Spain’s biggest securities exchange. More than 1.6 million shares couldn’t be sold today, while there were bids for only about 650 shares at 6.80 euros, according to Fernando Canales, another spokesman for BME. That means the company may face further losses tomorrow, he said.

Pescanova, which has about 10,000 employees and a presence in more than 20 countries, counts more than 100 vessels and almost 50 fish-farming plants among its assets, according to the company’s Website.

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