Pescanova Seen Winning Creditor Vote for Debt Restructuring

Pescanova SA is said to have won backing from a majority of creditors to restructure its debt a year after the Spanish fishing company entered bankruptcy protection.

More than 60 percent of creditors voted in favor of the plan, which would hand control of the company to its biggest lenders, according to two people familiar with the results. At least 50 percent of creditors had to back the restructuring proposal.

The operator of 90 ships as well as fish farms and processing plants from Spain to Chile needed to reach a deal with lenders by April 30 to avoid liquidation. Pescanova’s bankruptcy judge still has to verify the votes and will publish the final count tomorrow at the earliest, said the people, who asked not to be identified because the matter is private.

The proposal will receive majority support based on available data and official results will be announced in coming days, Pescanova said in a statement yesterday.

The plan will see Banco Sabadell SA, Banco Popular Espanol SA, CaixaBank SA, NCG Banco SA, Banco Bilbao Vizcaya Argentaria SA, Bankia SA and Unione di Banche Italiane SCPA take control of the Pontevedra, Galicia-based company. Shareholders Damm SA, the Barcelona-based brewer, and Luxempart SA will withdraw from the restructuring, an April 28 regulatory filing shows.

Debt Division

Creditors will retain 1 billion euros of the company’s debt: 300 million euros of junior facilities, 400 million euros of senior borrowing, and a new 300 million-euro tranche of subordinated debt.

The subordinated tranche will mature in 20 years and pay annual interest of 1 percent if cash is available, otherwise interest will be accrued and capitalized then paid at maturity, according to the filing. The banks also guaranteed 125 million euros of super-senior debt.

Auditors found Pescanova had more than 2 billion euros of previously undisclosed debt as it filed for creditor protection in April last year, prompting a fraud investigation. The company had 3.25 billion euros ($4.5 billion) of net debt at the end of 2012, according to a Dec. 10 statement from court-appointed administrator Deloitte LLP.

Pescanova borrowed from more than 100 lenders, a list of creditors submitted by Deloitte show.

Pescafina Subsidiary

Creditor support for its restructuring plan allows Pescanova to avoid liquidation, which happens to about 95 percent of companies that enter insolvency proceedings, according to Madrid-based Colegio de Registradores, a company that tracks corporate registrations. Pescanova employs 13,000 people worldwide and 2,000 people in Spain.

Holders of more than two-thirds of the debt of Pescanova’s Pescafina SA unit voted in favor of the restructuring plan, the company said. The Spanish seafood producer, acquired by Pescanova in 2000, filed for bankruptcy in July, according to a regulatory filing.

The outcome of yesterday’s vote was earlier reported by Spanish newspapers El Pais, Expansion and El Economista.

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