Facilities belonging to the brewer firm Damm in Barcelona. (Photo: Anneli Salo/CC BY-SA 3.0)

Pescanova’s creditor banks end negotiations with Damm

SPAIN
Thursday, March 27, 2014, 00:50 (GMT + 9)

The consortium led by the brewer firm Damm and the funding firm Luxempart has not improved the conditions presented in its agreement proposal with creditors of the Galician multinational firm Pescanova so banks decided to definitely end the negotiations.

According to various financial sources, the consortium did not comply with the terms that had been previously agreed, for example, reducing the debt relief (in the current offer it is between 70 per cent and 90 per cent).

Some analysts believe it is very difficult for banks to have access to a new negotiation with the consortium," after several deceptions," Cinco Dias reported.

On Tuesday, G7 banks -- Sabadell, Popular, CaixaBank, Bankia, Novagalicia, BBVA and UBI Banca -- met to see if among its members there is sufficient consensus to present plan B they themselves have created.

The idea is to keep Pescanova, along with an industrial partner, once the multinational firm starts the liquidation process.

So far, no decision has been taken although the creditor banks agreed to send a letter to the trustee Deloitte to request that the firm’s Spanish subsidiaries not to be claimed to be under the insolvency process.

Banks would be willing to face the refinancing of Pescanova’s debt without deductions.

Previously, Damm had proposed the injection of EUR 150 million in Pescanova to avoid its liquidation.

Not only the bank rejected Damm’s plan but also the minority shareholders of the fishing firm, grouped in AMAP association.

"Finally it has been proved that the claims expressed by Damm and Luxempart with the capital injection they intend, as the proposal to support funds has been presented, are designed to achieve a high return on the investment they have made since the first year of life of the company, and this may affect the survival of the new company after the adoption and implementation of the agreement," the shareholders stated in a press release.

Pescanova criticized banks that have not submitted an alternative agreement.

"The Creditors’ Meeting Act allows the company under this process to propose its own agreement and so has acted this Council. And also creditors should be allowed to express alternative proposals. Yet none of Pescanova’s creditors has exercised that right," expressed the company in a statement.

"After a review of the non-binding offers received for refloating Pescanova, its board decided to support the proposed agreement submitted by the consortium formed by Damm and Luxempart," it added.

For the Galician company, it is "a realistic proposal" that "harmonizes an asymmetric treatment of the debt, which is inevitable due to its unequal composition and distribution of guarantees between the parent company and subsidiaries, with the introduction of equanimity and defensible criteria against the diversity of interests, all legitimate but in disagreement, of the creditors."

Pescanova entered the creditors’ meeting phase at the end of April 2013 and its current total debt amounts to around EUR 4,000 million.

Related article:

- Pescanova’s offer does not convince creditor banks

By Analia Murias
[email protected]
www.seafood.media
 

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