MADRID Nov 13 Spain's biggest consumer
appliance company Fagor said on Wednesday it had
started insolvency proceedings after failing to reach a deal on
debt which it needed to keep going as sales fell.
Spanish bankruptcies have risen steadily this year, after a
prolonged economic downturn that sapped consumer spending and as
bank lending falls.
Fagor, however, was part of the Mondragon group in the
northern Basque Country region, a large cooperative seen as a
flexible organisation that was riding out the crisis.
Fagor is the fifth-largest electrical appliance company in
Europe. Its Irish subsidiary also started bankruptcy proceedings
on Wednesday, while its French unit did the same last week. The
company, which also operates in Morocco and Poland, said more
subsidiaries would also file for insolvency in the coming days.
Fagor, which has total debt of 1.1 billion euros ($1.48
billion) according to Thomson Reuters data, began warning of
liquidity problems as far back as 2009.
It needed 170 million euros to cover immediate liquidity
needs, after filing for creditor protection in October, but
Mondragon declined to provide the funds, leaving Fagor with few
The company, which had just over 5,600 employees at the end
of June, posted 2012 annual sales of 1.17 billion euros, down a
third since 2007.
Companies in administration in Spain can emerge from
bankruptcy if they work out a restructuring and a deal with
($1 = 0.7442 euros)
(Reporting by Robert Hetz and Sarah White; Editing by Elaine