Pescanova Lenders Said to Seek to Seize Control in Restructuring

Lenders to Pescanova SA, the Spanish fishing company trying to avoid liquidation, won’t back a shareholder restructuring plan and will seek to take control of the company, according to two people familiar with the matter.

The banks plan to find an industrial partner to manage the business, said the people, who asked not to be identified because they’re not authorized to speak about it.

A bankruptcy court has given creditors until April 15 to approve the proposals from shareholders Damm SA, the Spanish brewer, and Luxempart SA, which includes an increased equity stake for lenders in exchange for additional capital. 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.

A Pescanova official, who asked not to be identified citing company policy, declined to comment on the restructuring.

“We consider that the proposal Pescanova has presented is the best for the company given that it’s focused on securing its viability and doesn’t leave the company with an unsustainable debt load,” Damm said in an e-mailed statement. “The accord is fair for all parties involved.”

Auditors found Pontevedra, Galicia-based Pescanova had more than 2 billion euros ($2.8 billion) of previously undisclosed debt after it filed for creditor protection in April, prompting a fraud investigation.

It had 3.25 billion euros of net debt at the end of 2012, according to a Dec. 10 statement from court-appointed administrator Deloitte LLP. First-half results from 2012 reported financial debt was 968 million euros at the end of June.

Steering Committee

The seven banks that comprise the steering committee of lenders are Banco Bilbao Vizcaya Argentaria SA, Banco Popular Espanol SA, Banco Sabadell SA, Bankia SA, CaixaBank SA, NCG Banco SA and Unione di Banche Italiane SCPA, the people said.

“We believe the company is viable but the load must be shared more equally in a restructuring,” Banco Popular Chairman Angel Ron said March 21. The proposed restructuring plan doesn’t respond to the terms agreed with shareholders, he said.

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