The company Soares da Costa has presented a new proposal for the company's recovery (PER) in court. Joaquim Fitas, the CEO of the company, is confident creditors will approve of the process.
The Portuguese company Soares da Costa has given the court a new plan for the recovery of the company, after the disapproval from the judge from the Trade Court of Gaia, last May.
“We are confident that the plan will be approved by our creditors, including Caixa Geral de Depósitos (CGD), our largest creditor, which will give a positive signal to our creditors“, stated the CEO of Soares da Costa, Joaquim Fitas, to ECO. “We believe CGD will change its previous vote”, he adds.
The first PER (Processo Especial de Revitalização — a process for companies in debt to negotiate a revitalization of the company with its creditors) was not approved because the judge from the Trade Court of Gaia thought the construction company granted European and African creditors an unequal treatment. Joaquim Fitas assures that this has been changed.
“There was no differentiation between European and African creditors. What we had was a differentiation between strong currencies and weaker currencies that had to do with a currency devaluation, but this point was not understood equally by the judge, so we changed the situation and now the currencies have the same haircut and we will not distinguish between financial and non-financial debt”, stated the CEO of the construction company.
Joaquim Fitas says that “every other presumptions in the restructuring plan remain the same” and are based on the belief that “the company is viable” and that an insolvency “is worse for creditors who would only be able to get around 5% of their credits”.
The company’s debt is now standing at 700 million euros. The construction company is asking for a 50% debt pardon, which, in terms of volume, corresponds to 300 million euros. Joaquim Fitas further disclosed that Soares da Costa needs to “restructure its debt to suppliers, fully pay the Portuguese State and also fully pay employees their outstanding wage claims; indemnities will be paid in five parts”.
The company’s restructuring also foresees the dismissal of 700 employees, in a total of 1,700. The total costs of restructuring the company is 36 million euros, while the first plan would cost 45 million euros.