Eroski is analyzing the situation for 500 spaces in order to decide whether to sell them or close them. The company, underneath the parent company Mondragón, is starting to feel the effects of Fagor's downfall. Previously elEconomista has warned that Eroski's creditor banks could lose confidence in the wake of the Fagor debacle.
After news broke of Fagor's troubles, creditor banks soon came knocking to ask the company to divest of its assets in order to pay 2.5 billion euros of refinanced debt. For now, it should be able to pay 37 million on the principal of this debt in January.
Officials from Eroski won't admit that the Fagor bankruptcy proceeding is affecting their business. Their denial is so strong that they have refused aid from Mondragón in order to keep it out of bankruptcy proceedings. This kind of blindness is not blameless. The Ministry of the Economy, the Basque government and the Bank of Spain have all warned that the Mondragón group could become a major economic risk if Fagor cannot be saved.
As was expected and not fifteen days after the corporation's primary brand fell, Eroski is strengthening and revising its business strategy. Agustín Markaide, the distribution chain's president, never figured out that the Fagor crisis was going to create problems for his company.
In 2012, the company registered 450 million euros in losses and was weighed down financially from purchasing Caprabo, a purchase that put a billion euro hole in its budget. If Eroski's strategy fails, the Fagor disaster could eventually pull down Mondragón.