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Spain's FAGOR begin bankruptcy proceedings

Source: Bloomberg - Thu 31st Oct 2013
Spain's FAGOR begin bankruptcy proceedings

Fagor Mastercook SA filed for protection at a court in San Sebastian, northern Spain, according to a statement to regulators today. The parent company remains in talks with lenders, after seeking preliminary creditor protection Oct. 16.

The number of Spanish companies in bankruptcy proceedings rose 15% from a year earlier in Q2, government data show, as banks continued to rein in lending and the economy struggled to emerge from a 2-year recession.

Fagor has €850 Mln of debt as of June 30, Elena Goirizelaia, a spokeswoman for the company, said in a telephone interview. That figure includes €185 Mln of subordinated debt.

Debtholders include workers of Fagor, who at the same time are partners of the company, she said.

Fagor is owned by Mondragon Corp., a closely-held cooperative conglomerate. Its products include washing machines and pressure cookers, with most revenue coming from foreign markets. International sales account for 76% of revenue, compared with 24% from Spain.

The potential closure of Fagor would mean about 10,000 job losses, including 5,600 Fagor staff and more than 4,000 staff at suppliers, Cinco Dias reported today, without saying how it got the information.