Spain's Pescanova gets reprieve on debt restructuring deadline

Mon Apr 14, 2014 11:32am EDT

* Fishing company racing to avoid liquidation

* Lenders balk at extent of losses being asked to assume

* Company given extra 2 weeks to win creditors' support

MADRID, April 14 (Reuters) - Insolvent Spanish fishing company Pescanova, which is racing to avoid liquidation, said on Monday it had been granted an extra two weeks by a court to win the support of creditors for its debt restructuring plan.

Lenders have balked at the extent of losses the company, now being managed by the administrator Deloitte, wants them to take.

Pescanova, a household name in Spain for its fish fingers, became one of Spain's biggest bankruptcies last year. Auditors uncovered more debts at the firm after it filed for insolvency, and it owed 3.2 billion euros ($4.44 billion) in total at the end of 2012, according to Deloitte.

Creditors now have until April 30 to sign up to Pescanova's debt proposal, the company said in a statement to Spain's stock market regulator.

Lenders include top Spanish banks such as Sabadell , Popular, Caixabank and BBVA .

Pescanova, based in the northern Galicia region, and which catches, processes and packages fish in Spain and Latin America, has so far struggled to win the backing it wants from creditors.

Its main shareholders, Barcelona-based brewer Damm and investment firm Luxempart, have put forward a restructuring proposal that would see banks salvage 700 million euros of Pescanova's debt.

In exchange for taking losses on the rest of their debts, creditors would get a 35 percent stake in the company.

But lenders have pushed back against some aspects of the plan, and want the company to retain about 1 billion euros of its debt, a banking source previously told Reuters.

That would be equivalent to average losses of 66 percent on the debt, the source said.

Pescanova needs at least 50 percent of creditors to back its plan for it to go through. Otherwise, it faces liquidation, though banks could try and snatch up some of the company's assets and team up with other industrial partners if that happened, to try and recover some of the value of their loans. ($1 = 0.7201 euros) (Reporting by Tomas Cobos and Andres Gonzalez, writing by Sarah White; Editing by Susan Fenton)

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