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Pescanova is closing in on a last-minute deal with its creditor banks that will ensure the survival of the financially stricken frozen fish group and prevent the biggest industrial collapse since the start of the Spanish economic crisis.

The Spanish group has until the end of the month to finalise terms with more than 100 lenders, but people familiar with the discussions said the deal was all but done. On Tuesday, a group of investors presented a rescue plan to the bankruptcy court that is understood to enjoy broad support among the banks.

“Pescanova is saved”, one participant in the negotiations said, adding that 45-47 per cent of creditors had already signalled their support for the new plan, with more expected to join once the court has signed off on the proposal.

Under the terms of the rescue deal, the banks will have to take a cut of 60-90 per cent on the value of the debt owed by the group. They will also have to provide part of a €150m capital injection to keep the shrimps-to-fish finger group afloat. In return, they will receive a stake of 35 per cent of a revamped Pescanova.

The agreement will help protect 2,000 jobs in Spain and another 12,000 abroad. The rescue is of particular importance to Pescanova’s home region of Galicia, a stronghold of the ruling Popular party and the home of Mariano Rajoy, the Spanish prime minister.

A household name across the country, the Spanish group declared insolvency last year after disclosing debts of €3.6bn – more than three times the figure stated in official accounts.

The debts had piled up as a result of the group’s global expansion drive, which saw Pescanova build and acquire fish farms and processing plants in Africa, Latin America and the Caribbean, along with a fleet of more than 90 ships.

The group’s debts were mostly hidden in the accounts of its overseas subsidiaries, and were not consolidated on Pescanova’s own balance sheet.

Pescanova shareholders appointed a new management last year, led by Juan Manuel Urgoiti as chairman of the board. Mr Urgoiti told the Financial Times last month that Pescanova remained a viable group, but only if the creditor banks involved in the bankruptcy process agreed to accept hefty cuts on outstanding loans worth €1.8bn.

Under the new agreement, details of which were published in a filing to the Madrid market regulator on Tuesday, the banks will be left with 35 per cent of the group, which will be renamed Nueva Pescanova.

Damm and Luxempart, two of the biggest shareholders in the old group and the architects of the rescue deal, will hold 30 per cent. Damm, Luxempart and the creditor banks will inject €112.5m in fresh capital into Nueva Pescanova, with another €37.5m expected to come from other former shareholders, who will be asked to subscribe to shares in the new company equivalent to another 30 per cent.

Copyright The Financial Times Limited 2017. All rights reserved.

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