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http://www.reuters.com/article/2013/06/17/lsb-idUSL5N0ET27O20130617?feedType=RSS&feedName=bankruptcyNews

Mon Jun 17, 2013 10:02am EDT

(Reuters) – Spain’s La Seda de Barcelona, LSB, which makes plastic bottles in Europe, Turkey and North Africa, said on Monday it would begin insolvency proceedings after failing to reach a deal with creditors.

A record 2,500 Spanish companies squeezed by a deep recession filed for insolvency in the first three months of this year, hurting lenders as they take ever bigger provisions against losses on loans, eating into profits.

Catalonia-based LSB said it has been in talks with its lenders since September last year after its business ran into trouble because of high raw materials costs and excess supply of the PET plastic containers that it makes.

LSB’s shares rose 7 percent on Monday to 0.744 euros per share, recouping losses made on Friday. LSB’s insolvency filing gives it another chance to negotiate with creditors, while a previous refinancing plan which fell through would have wiped out a large part of shareholders’ equity.

La Seda had a debt load of just 600 million euros ($800 million) at the end of 2012, including debt to providers, according to company filings.

U.S. hedge fund Anchorage is La Seda’s single biggest creditor, after it bought 37 percent of the company’s syndicated loans on the secondary market, a source familiar with the restructuring talks said.

The group has 462 million euros in syndicated loans from banks, according to Reuters loan market news and analysis service RLPC.

Of that, a 235 million euro portion needed to be restructured, the source close to the talks said.

Portuguese banks Caixa Geral and BCP are also big lenders, while HSBC and Spain’s nationalised Catalunya Banc also feature among prominent creditors.

RLPC reported in late May that La Seda would face insolvency if creditors failed to back a restructuring plan put forward by Anchorage, which offered to inject 30 million euros in the business in exchange for 82 percent of its equity.

La Seda de Barcelona said in a statement that a refinancing plan had failed to get the backing it needed from 75 percent of creditors.

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