Reuters: Bankruptcy News: UPDATE 1-Spain's Pescanova says to file for insolvency

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UPDATE 1-Spain's Pescanova says to file for insolvency Apr 5th 2013, 10:54 Fri Apr 5, 2013 6:54am EDT * Company to file for insolvency * Pescanova has up to 2.8 bln euros debt - sources * 2012 results expected on Friday (Recasts, adds change of auditor, share price, detail) By Tomás Cobos MADRID, April 5 (Reuters) - Spanish fishing company Pescanova is filing for insolvency after a month of negotiations with creditors and boardroom battles failed to settle its future. An all-day board meeting on Thursday ended in the early hours of Friday without agreement and shareholders locked horns over the role of Chairman and main shareholder Manuel Fernandez, with many wanting him to step down, a source present at the meeting said. Pescanova, which catches, processes and packages fish on factory ships, is the latest of many Spanish companies to be forced to the wall in a prolonged recession and credit crunch. It has a profitable underlying business but was dragged down by debt after a massive business expansion. "Given the fact it has not been possible to reach a deal with the company's creditors, the board, for the sake of keeping Pescanova operating and protecting its interests, agreed to file for insolvency proceedings," the company said. Since the start of March, the future of Pescanova, a brand known by every Spaniard for its highly-popular fish sticks, has hung in the balance. First it failed to report its full-year results by an end-of-February deadline set by the regulator, then it temporarily suspended financial advisors and announced plans for a board meeting, only for some board members to deny the decision hours later. On March 11, the market regulator said it would investigate the fishing firm over possible market abuse. The following day, the group said it had found discrepancies between its accounts and its bank debt. The debt was first put at a minimum 1.5 billion euros ($1.93 billion) but financial sources said the figure was closer to 2.8 billion euros. NON-AUDITED RESULTS The company had three to four months to renegotiate its debt with creditors but disagreements within the board made it impossible to carry the process forward. It has now said it would revoke its contract with auditors BDO and hire a forensic auditor. The release of non-audited 2012 results is expected later on Friday. Pescanova said in a statement to the stock market regulator that it hoped to find a solution with creditors to guarantee the rights and interests of its workers, creditors and shareholders and assure the continued management of Pescanova. The company, which has been operating for more than 40 years, employs around 3,400 people in the north-western region of Galicia, home to Prime Minister Mariano Rajoy. The group's creditors, according to a banking source, include Spain's biggest banks Sabadell, Caixabank , Popular, Santander, BBVA and Bankia. Pescanova's shares have been suspended from trading since March 12 and are unlikely to resume soon. Much of its stock is held by retail investors. The company, which has a market capitalisation of 170 million euros, saw its share price fall 74 percent over 12 months to 5.91 euros on the last day it traded. ($1 = 0.7780 euros) (Additional reporting by Jesus Aguado, Carlos Ruano and Paul Day; Writing by Clare Kane; Editing by Julien Toyer and Tom Pfeiffer) Link this Share this Digg this Email Reprints

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