The board of directors of Nueva Pescanova will call its shareholders and creditors to a voluntary debt to equity swap in a bid to secure the future viability of the company and accomplish its business plan.
The decision was taken following a court judgement which has upheld approval of the refinancing agreement of 30 June 2020, which foresaw the swap of a large part of the debt taken over from Pescanova creditors’ composition (currently €643 million) into equity.
Last August, Nueva Pescanova received the approval for this refinancing agreement, which was challenged by Broadbill and other funds, as well as by Pescanova, who argued that creditors would ‘get greater value with the winding up of the company rather than with the swap offered’, also claiming that ‘the plan would impose a disproportionate sacrifice on them’.
The judgement states that the plan complies with the principle of equal treatment, does not impose a disproportionate sacrifice on creditors and is justified to safeguard the future viability of the company.
However, the judgement agrees, in part, with the challengers in that the majority required for approval was not achieved and has consequently approved Broadbill’s challenge but rejected claims brought by Pescanova and the other challenging funds. The judgement cannot be appealed.
In 2017, 35% of the €1 billon debt inherited from the creditors’ composition of the former Pescanova was converted into capital. This increase will enable the company to restructure with a sound equity and undertake business without the burden of its current debt.