Decision day for Pescanova

By

Pilar Caride, SeafoodSourcecontributing editor, reporting from Vigo, Spain

Published on
April 15, 2014

Today is the day embattled Spanish seafood giant Pescanova, along with the rest of the seafood industry, has been waiting for, as the company’s creditors are expected to make a decision that will define the company’s future.

Today, Pescanova’s creditors will present their decision on whether to hold to the creditors' agreement presented by Damm and Luxempart. To work, the agreement needs the support of Pescanova bankruptcy trustee Deloitte, a Spanish court judge and 51 percent of the creditors.

Pescanova has been embroiled in troubles for more than a year after declining to present to Spanish regulators its annual accounts at the end of February 2013. Subsequent investigations revealed discrepancies between the company's accounting and its debts, leading to allegations of accounting fraud. The scandal drove the company into bankruptcy and led to the replacement of its board of directors and president.



Most recently, Damm and the creditor banks began negotiations to avoid Pescanova's liquidation, but according to reports in the Spanish media, there is a division of opinion among decision makers at the main creditor bank on whether to support the offer submitted before the court.

According to the same reports, the aim of the last meetings was to look for common ground and reach an agreement. Damm and Luxempart have given in, guaranteeing to the creditors bank the recovery of EUR 1 billion (USD 1.34 billion) in debt, which represents a reduction of the debt higher than 70 percent, one of the creditor bank’s requests.

In addition, according to the Europa Press news agency, the banks will delay the payment of a credit due date to the end of April that is worth EUR 18 million (USD 24.82 million). This credit is part of the emergency lending granted in June 2013 by the autonomous government of Galicia and six banks for EUR 56 million (USD 77.23 million).

On the other hand, last week Pescanova’s bankruptcy trustee, Deloitte, valued the offer of creditors' agreement presented by the company.

According to the media, Deloitte explained details of the above mentioned report and gave it a positive valuation. They conclude that the viability plan and payments are based on reasonable, solid and consistent hypotheses.

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