February 26, 2014 / 6:26 PM / 4 years ago

Spanish owner of TV character Pocoyo enters administration

MADRID, Feb 26 (Reuters) - 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 previously estimated.

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 debts.

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 Europe. ($1 = 0.7317 euros) (Reporting By Sonya Dowsett; Editing by Elaine Hardcastle)

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