MADRID Feb 26 Spanish entertainment company
Zinkia, owner of the children's TV character Pocoyo,
entered administration on Wednesday, the latest Spanish company
to seek protection from creditors in an economic slowdown.
Despite reaching agreement on refinancing with bondholders,
banks and commercial creditors, Zinkia did not manage to
renegotiate the terms of a 2.5 million euro ($3.4 million) loan
with a private lender, the company said in a statement.
"Zinkia continues to negotiate with different creditors and
potential investors in order to find a solution which will allow
it to come out of administration as quickly as possible with the
least damage to its brands," the company said in a statement.
Zinkia's shares were suspended from trade by the Spanish
stock market regulator after the announcement. Shares have
fallen by over a third this year so far.
The company gave a profit warning earlier this year saying
it expected 2013 core earnings to come in 97 percent less than
Pocoyo, a small boy with a blue hat whose best friend is a
pink elephant, has been broadcast around the world from the
United States to Australia to Russia. The British version is
voiced by actor Stephen Fry.
Zinkia, which floated on the Madrid stock exchange in 2009,
tried to place 7.8 million euros of bonds with an 11 percent
coupon last year but the market regulator warned potential
investors the company did not have enough funds to pay its
Nearly 9,000 Spanish firms went into administration in 2013,
10 percent more than those registered in the previous year and a
record high as companies battled tight credit conditions, late
payments from suppliers and falling demand.
Credit rating agency Axesor estimates that nearly 30,000
companies have filed for insolvency proceedings since the
beginning of Spain's sharp economic downturn five years ago.
The economy has tentatively emerged from recession, but
companies say that it is still hard to get loans from banks and
domestic demand is still low as Spaniards fret about keeping
their jobs amid one of the highest rates of unemployment in
($1 = 0.7317 euros)
(Reporting By Sonya Dowsett; Editing by Elaine Hardcastle)