The board of directors of the embattled Spanish seafood company Pescanova has chosen a bid from Damm to guarantee the company's viability going forward.
Pescanova has been rocked by scandal and legal troubles ever since an investigation earlier this year revealed massive debts that had been concealed from investors and regulators. The investigation led to a removal of the company's leadership and a call for restructuring. The group met in an extraordinary session earlier this month to consider offers from various investors to be principal supporters of the company going forward.
After studying the five bids received, it was agreed without any votes against "to take into consideration the not binding offer submitted by the consortium Damm, KKR, Luxempart and Ergon as the most suitable to manage the restructuring process of Pescanova and guarantee the viability of the company," according to the transcript.
Once this decision was made, Deloitte announced that the negotiating process will start immediately with its main financial creditors. The aim is to reach an agreement related to a creditors' agreement enabling the survival and continuity of the company.
According to media reports in Spain, the chosen proposal involves the injection of EUR 250 million (USD 346 million) from Damm, Luxempart, KKR and Ergon Capital Partners with the end to take control over Pescanova (51 percent) and reduce the debt with a maximum discharge of the debt repayment of 80 percent.
Once this information was known, the regional newspaper Faro de Vigo published that the minority shareholders demanded to negotiate with the board of directors, Damm and the bank because they consider that they weren't taken into account.
In related news, on 4 December Deloitte published a notification that Pescanova ended the sale of all shares of the 50 percent of the social capital of the Australian company Austral Fisheries PTY Ltd. The buyer is the Japanese Maruha Nichiro Seafoods, INC.
According to Deloitte, "this transaction is framed in the planning made in the bankruptcy process with the end of making a proposal of creditors' agreement."
Furthermore, they have highlighted that those assets were not included in the viability plan. The final price of the operation was EUR 29.7 million (USD 41 million) for sale of Pescanovas' shares (39 percent of social capital of Austral Fisheries) and the sale of shares owned by Antartic Polar Pty LTD., Australian subsidiary of Pescanova.
