With only three days left until the deadline for accepting proposals to control and guarantee their company's future, Spanish seafood giant Pescanova's board of directors is meeting Friday in its Chapela, Vigo headquarters to analyze a hybrid offer of the company's creditor bank and Damm, according to Spanish media.
Pescanova has been embroiled in scandal for a year now, ever since the company declined to disclose information about its debts, leading to bankruptcy, an ongoing investigation by Spanish regulators and allegations of financial malfeasance. The ongoing procedures led to the removal and replacement of the company's President and CEO, and the entire board of directors.
Now, the company has to present a plan to a bankruptcy court judge detailing how it will proceed in the future, including who will control the company, and who will help finance its debts. The negotiations have continued in the last few days resulting in the preliminary agreement published yesterday by several regional media.
In this proposal, the creditor bank takes control of Pescanova with major shareholders Damm and Luxempart as industrial partners. The offer includes a discharge of 60 to 70 percent of the company's debts, with an investment higher than USD 275.9 million (EUR 200 million).
Although Damm had prepared a previous offer, together with the funds KKR, Ergon Capital Partners and Luxempart, which was supported by Pescanova's board of directors, the current preliminary agreement leaves KKR and Ergon Capital out of the offer.
The Damm and Luxempart offer is not the only one on the table. The principal competing offer, led by former Spanish Minister of Defense Eduardo Serra, is supported by five investment funds (Blue Crest, Knight Head, Dupont, Scoggin Capital and J. Goldman) and the foreign creditor bank of Pescanova. That offer includes an injection of funds amounting to USD 413.91 million (EUR 300 million) and a debt cut of 70 to 80 percent, according to the press agency Europa Press.
According to Spanish media, Pescanova's board of directors will analyze the Damm offer Friday with the aim of submitting its agreement proposal on Monday to the bankruptcy judge. It is expected that Pescanova will be the favoring this proposal.
