Spain

Fomento de Construcciones & Contratas SA is in talks with creditor banks to convert part of the Spanish infrastructure company’s loans into payment-in-kind debt, according to two people familiar with the matter, Bloomberg reported. The higher-yielding PIKs, which allow borrowers to roll up interest so that it's paid when the debt comes due, will total about 1.5 billion euros ($2.1 billion), said the people, who asked not to be identified because the negotiations are private. The Barcelona-based company is currently seeking to refinance about 5 billion euros of loans, they said.

Spanish loss-making consumer appliance company Fagor filed for protection from creditors while it tries to refinance its debt, the company said on Wednesday, after suffering a prolonged period of falling sales. Fagor said in a statement it had begun "negotiations with creditors to reach a refinancing agreement to guarantee its financial stability." Under Spanish bankruptcy rules it has four months to reach a deal. Its total debt has risen to 1.1 billion euros ($1.5 billion) according to Thomson Reuters data.

A rented office overlooking a dusty rail track near Madrid’s airport was until recently the workplace of what would appear to be the most productive worker in all of Spain. From here a single employee presided over a company that from 2009 to 2011 made €9.9bn of net profits, all while earning an annual salary of only €55,000, the Financial Times reported.

Spain emerged from two years of recession late this summer, but it faces a long period of more austerity and painful adjustments before it can regain its footing and put most of its six million unemployed back to work, Prime Minister Mariano Rajoy said on Monday, The Wall Street Journal reported. "Spain is out of recession but not out of the crisis," Mr. Rajoy said in an interview with The Wall Street Journal, cautiously touting the effects of budgetary and structural overhauls that have been among the deepest in the euro zone.

Insolvent Spanish fishing firm Pescanova will ask its bank creditors to accept losses of between 70 percent and 75 percent on loans they made the company, a source with knowledge of the matter said on Wednesday, Reuters reported. Pescanova's new chairman Juan Manuel Urgoiti is due to meet with banks on Wednesday to discuss a plan to re-float the firm, which an audit by KPMG showed had debt of 3.6 billion euros ($4.81 billion), making it one of Spain's biggest bankruptcies. Pescanova's creditor banks include Sabadell, Popular, Caixabank and nationalised lender NovaGalicia.

Shareholders in Spain's Pescanova chose Juan Manuel Urgoiti as chairman of the insolvent fishing firm on Thursday, after the company's former head stepped down earlier this year amid charges of insider trading and falsifying information, Reuters reported. Manuel Fernandez de Sousa was removed in April from the helm of the company he had run for more than three decades. He has denied any wrongdoing. Urgoiti sits on the board of directors of retailer Inditex and is a former chairman of Banco Gallego.

Madrid is set to offer a crucial helping hand to Spain’s troubled financial sector by allowing banks such as Santander, BBVA and Banco Sabadell to reclassify billions of euros in deferred tax assets as tax credits, in a move that will make their balance sheets look much stronger. The country’s banks have been lobbying the government for months on the issue of DTAs, arguing that other eurozone countries such as Italy have already made similar changes.

While Spanish manufacturing and services expanded in August for the first time in more than two years, falling bank lending threatens small companies in a country where only 2 percent of businesses employ more than 20 people. That is overshadowing the recovery Prime Minister Mariano Rajoy forecasts after a two-year recession, Bloomberg reported. “Spanish companies are most often small family-run operations,” said Nathalie Gianese, director of studies at Informa D&B, the research arm of Spanish risk insurer CESCE S.A.

As Spaniards endure the worst economic crisis and deepest austerity measures in their country’s democratic history, start-up companies are proliferating, Bloomberg reported. Over the first seven months of the year, registrations of self-employed people increased by 21,992 while they fell by 6,826 over the same period a year earlier. The number of companies created increased by 8.2 percent in the first half as a 26 percent unemployment rate spurs entrepreneurship in a country where the government still accounts for one in six jobs.

Is Spain really on the brink of a remarkable recovery? It's a question with a significance that goes well beyond the troubled Southern European country, The Wall Street Journal reported.