Fagor Says It May Seek Full Creditor Protection on Debt WoesKatie Linsell
Fagor Electrodomesticos Soc. Coop. said it may seek full protection from creditors if the Spanish appliance maker can’t refinance debt.
The manufacturer of refrigerators, washing machines and ovens is in talks with lenders after seeking preliminary creditor protection on Oct. 16, the employee-owned company said in a regulatory filing today. Its Polish unit, Fagor Mastercook SA, filed for protection at a court in San Sebastian, northern Spain yesterday.
Fagor had 850 million euros ($1.16 billion) of debt as of June 30, Elena Goirizelaia, a spokeswoman for the company said in a telephone interview yesterday. That figure includes 185 million euros of subordinated notes and creditors include employees, she said.
“Fagor continues to carry out all possible steps to refinance its debts and to use any alternative ways of resolving the situation,” the company said in the filing.
Alfonso Alonso, head of Spain’s ruling People’s Party, said yesterday the company wasn’t viable because it wasn’t competitive. European appliance makers can no longer compete with Asian manufacturers, he said in an interview with state broadcaster TVE.
Fagor is owned by Mondragon Corp., a closely-held cooperative conglomerate which includes supermarket chain Grupo Eroski, both based in Spain’s Basque Country.
Fagor obtained a two-part senior loan totaling 165.6 million euros from banks including Banco Bilbao Vizcaya Argentaria SA, Banco Popular Espanol SA, Banco Santander SA, Bankinter SA, Bilbao Bizkaia Kutxa, Caja Laboral Popular and La Caixa, data compiled by Bloomberg show.
The company also has 100 million euros of subordinated bonds due 2049 and 60 million euros of perpetual notes, according to the data.
International sales account for 76 percent of Fagor’s revenue and the potential closure of Fagor would mean about 10,000 job losses, including 5,600 Fagor staff and more than 4,000 staff at suppliers, Cinco Dias reported today, without saying how it got the information.
There’s a public holiday in Spain today and phone calls to the company went unanswered.