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Pescanova, one of biggest world fishing companies, files for insolvency

07 April 2013

One of the world’s biggest fishing companies, Pescanova, announced it had filed for insolvency having failed to sell part of its Chile salmon farming business to Norwegian companies. The Spanish-based company also said it entered a preliminary phase of seeking protection from creditors. In recent months, Pescanova has struggled to make a profit on farmed crustaceans and fish investments. The company has reported debts of €1.5 billion and several of its boats and factories are mortgaged to an overall value of €100 million. However, the real state of the debt remains unknown, as auditors have found discrepancies in information provided.

A Spanish bank adviser said ‘This was totally unexpected. Like many other Spanish firms, Pescanova had debt-related problems, but it was still regarded as a solid company. It should have been able to avoid this situation.’ Last year, the company was valued at €500 million. As of today, the value of Pescanova has fallen by 60%. Pescanova has about 10,500 employees with a presence in more than 20 countries – including Namibia, South Africa, Mozambique and Angola. It counts more than 100 vessels and almost 50 fish-farming plants among its assets.

The newspaper El Mundo reported that Spanish may come at Pescanova’s rescue. An observer from Chile commented that ‘They also have another card to play: to sell the fishing quotas they received from Chile under the local system of ITQs [individual transferable quotas].’ The director of a Chilean environmental organisation, Ecoceanos, stated that ‘the situation of Pescanova is the clearest evidence of the transnational politics of fisheries and aquaculture, that privatize profits and socialize their losses, shifting costs to the states, the environment, workers and consumers.’

Editorial comment

Pescanova has been a key player in ACP countries’ fisheries, such as in South Africa, Namibia, Mozambique and Angola. These countries should receive information about what the company’s situation means for their involvement. It is important for all ACP countries to reflect on the value of the fishing rights they concede to such companies through property rights systems like ITQs, which go far beyond the value of the fish that can be caught. The allocation of an ITQ or similar transferable access right can be capitalised on by the owning company and be used as guarantee against a bank loan or bad debt.

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