Spain’s Pescanova Goes Bust After Fishy Accounting
Spanish fishing company Pescanova said early on Friday it would file for insolvency after failing to reach an agreement with its creditors following more than a month of negotiations.
The company began talks with creditors to avoid seeking creditor protection on March 1 after having accumulated debt of at least 1.5 billion euros ($1.9 billion), which company directors said could be higher.
Total debt is likely to be closer to 2.8 billion euros, according to financial sources. The group is expected to report 2012 earnings figures on Friday.
In mid-March Galicia-based Pescanova said it found discrepancies between its accounts and its bank debt a day after the stock market regulator opened an investigation into the company for possible market abuse.
"Given that it has not been possible in the short term to reach an agreement with its lenders and that its financial situation is at risk of deteriorating, the board ... has decided to seek creditor protection," Pescanova said in a statement to the market regulator shortly after midnight on Friday.
Pescanova, which catches, processes and packages fish on factory ships, is the latest in a growing list of Spanish companies which have been forced to the wall amid a deep and prolonged recession.
The group's creditors, according to a banking source, include Sabadell,Caixabank, Popular, Santander, BBVA and Bankia.
Pescanova's shares have been suspended from trading since March 12.
