MADRID, May 10 (Reuters) - Spain’s SOS Cuetara SOS.MC said on Sunday it would issue 200 million euros of new shares to plug a hole in its accounts after top executives were discovered siphoning off funds to buy shares in the olive oil bottler.
SOS said it was restating 2008 results and booking a loss after it emerged that chairman and deputy chairman Jesus and Jaime Salazar had channelled 212 million euros of the firm’s money into a holding company to buy SOS shares and then sell them to a sovereign wealth fund. That sale never went through.
The brothers were fired in April and neither has been arrested.
“After a long session that lasted all of Sunday, the board decided to make a significant provision against 2008 results,” the statement from the world’s biggest olive oil bottler said.
Following the restatement, which also took account of speculative exchange rate dealing, SOS said it made a net loss of 190 million euros last year, not the 32 million euro profit it reported in March.
After failing to reach an agreement on Friday, the board said that it never authorised the transfer of funds to the brothers’ holding company, Condor Plus.
The statement added that the capital increase would allow the company to comfortably meet its debt obligations.
“The capital increase, together with the one for 149 million euros carried out when Caja Madrid took a stake in January 2009, doubles the group’s shareholder funds, far outweighing the effect of 2008 losses and strengthening SOS’s solvency,” it said.
SOS Cuetara, which has sales of over 1 billion euros ($1.3 billion) a year, bottles Spain’s leading olive oil Carbonell and recently bought Italy’s best-selling brand Bertolli in a move to expand its global footprint, but generated heavy debt in the process. It also sells rice under various brands around the world including: Abu Bint, Aroz SOS and Comet.
SOS shares were suspended on Friday. (Reporting by Ben Harding, editing by Leslie Gevirtz)