The administration board will approve capital increase next week. (Photo: Mattes/HombredeHojalata/FIS/CC BY-SA 3.0)

Banks expand participation in Pescanova capital

The capital increase that Pescanova needs to take off strongly and leave behind three very difficult years has already been agreed. The banks that have controlled the company for more than a year (Caixabank, Sabadell, Popular, Abanca, BBVA, Bankia and UBI) yesterday settled the agreement that they had been negotiating for several months and that ended up taking longer than nine months for differences of criteria among the entities. Financial sources yesterday ensured that, in the end, there has been consensus and the plan is no longer reversed.

Thus, the board of directors of Nueva Pescanova, which will meet next Tuesday 20, will approve the capital increase for a total of EUR 345 million.
These sources have explained that the operation will be incorporated into the audited accounts of the year-end finances, in order to avoid qualifications, since, without them, the balance of the company's own resources is negative.

The next step will be the validation of the capital increase by the shareholders' meeting, which will be postponed to the first quarter of 2017.

The investment was necessary to ensure the viability of the company, and this is something that no entity has questioned, despite the complicated negotiations maintained until reaching the economic agreement, mainly due to the impact of this injection of capital in the provisions of each shareholder.

Assured feasibility

According to what is known, with this capitalisation, the strong group, the so-called G7 (made up of the aforementioned banks, Caixabank, Sabadell, Popular, Abanca, BBVA, Bankia and UBI) will have its weight above 300 million, which will continue to have more than 50 per cent of Pescanova’s capital.

The new agreement reached is that this operation will lead to a strong increase in foreign banks, especially HSBC (now 8.9 per cent) and investment funds, such as SVP (with 6.2 per cent), which will reach more than 40 per cent due to the difference in the quality of the debt to be capitalized.

The shareholding of the creditor banks in Nueva Pescanova, prior to the planned expansion before the end of the year, places Caixabank as the first owner bank, with just over 15 per cent of the company, followed by Sabadell (14.6 per cent), Popular (9.8 per cent), Abanca (more than 8 per cent), BBVA (6.2 per cent), Bankia (5.1 per cent) and the Italian UBI (2.8 per cent).

The expansion is necessary so that the multinational firm can undertake a business plan that requires an investment of EUR 125 million in the next four years, of which 65 million will be destined to maintenance expenses of the complex infrastructure of the group, where 12,000 people work; and about 60 million more will finance capital-generating investments, according to sources close to the company. The goal is to reach 1.4 billion in sales, compared to 1,000 in 2015. The forecast for the closure of 2016 is close to 1.2 billion.

These deadlines leave practically no option to re-list the old shareholders, which has not yet been able to submit the documentation required by the regulator. Asked whether those small shareholders of Pescanova SA will enter into the capital increase, the company ensured it has no news about such an operation.

Source: La Voz de Galicia

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