The future for the giant Galician fishing company Pescanova will be decided next week upon the selection of its next executive board. Its makeup will set the course that the company will take going forward and determine what solutions it employs to heal a near-bankrupt business and escape the trouble that years of mismanagement have caused. Former Pescanova CEO and primary shareholder Manuel Fernández Sousa was then at the helm.
When Sousa realized that his poor management decisions would hurt the company, he reduced his stake in Pescanova to 7.4% without advising the company's board of directors or the CNMV, and he is still trying to manipulate Pescanova's future by influencing who gets elected to the board and ensuring they are going to act in his best interests.
To that end, he is negotiating an alliance with Cartesian, the fund that owns 5% of Pescanova. And he will also try to capture the minority shareholder vote. Fortunately, this will be difficult to do. The beer company Damm, the management fund Luxempart and Iberformento (who own 15.3% of Pescanova) pressured Sousa to step down, and now they are joining hands and seeking support from another minority shareholder, Carolina Masaveu, that owns 3.7% of the fishing company.
This group of minority shareholders is winning support each day and has picked a strong candidate to lead Pescanova, Juan Manuel Urgoiti. Rebuilding the company will not be easy. A major budget imbalance, a high debt load that will need to be renogotiated with the banks and a resulting cash shortage will require Urgoiti to make quick and challenging decisions. It is very likely that these decisions will include a massive asset selloff.
The upside is that Urgoiti, who is one of Amancio Ortega's confidants, comes from the financial sector and has years of experience living and working in Galicia. These are highly useful traits that he can leverage to save Spain's multinational fishing company.
