Spain

Spanish wireless networks provider Gowex, at the heart of an accounting scandal that has hit Spain's reputation among investors, started insolvency proceedings on Thursday, giving it four months to reach a deal with creditors or face bankruptcy. Spain's High Court also said it had charged the company's founder and former chief executive Jenaro Garcia Martin with three financial crimes: false accounting, distortion of economic and financial information, and insider trading. He was called to testify next Monday, when he is also due to hand over his computer and his phone.

Spanish wireless networks provider Gowex said on Sunday it would file for bankruptcy and its CEO and founder Jenaro Garcia Martin had resigned having acknowledged reporting false accounts for at least the last four years, Reuters reported. The move came just hours after the company said it had hired PricewaterhouseCoopers to carry out a forensic audit of its accounts in a response to a report from a firm called Gotham City Research that had questioned its revenue reporting.

Turning its back on fiscal austerity, the Spanish government presented a broad package of income and corporate tax cuts on Friday that are scheduled to begin before next year’s general election, the International New York Times reported. The cuts roll back some of the tax increases that Prime Minister Mariano Rajoy began putting into effect shortly after his conservative Popular Party swept to power in 2011 by winning a parliamentary majority. The next election is scheduled to take place by November 2015.

Spain is looking at extending a law enacted in March which helps struggling companies cut debt and avoid bankruptcy to firms already in the liquidation process, Economy Minister Luis de Guindos said on Tuesday, Reuters reported. The rules were designed to ease loan refinancings by making it harder for small creditors to veto deals between companies and their lenders and create a mechanism for creditors to write off part of the debt. The amendment would be passed in the next few weeks, de Guindos said.

The group of Pescanova’s creditor banks known as G7 intends to start express insolvency this week in the Spanish Galician multinational firm’s subsidiaries, FIS reported. Sources close to the bank said it is necessary to carry out this process "soon," the newspaper Faro de Vigo reported. For the banks, the documentation is "almost ready" for all the Spanish subsidiaries – except for Insuiña SL and Sémolas del Noroeste SA (HASENOSA) – to be declared as undergoing creditors’ meeting.

Six years after the start of an economic crisis that left Spain on the verge of collapse, the country has finally seen bankers sentenced for financial abuses, the Irish Times reported. On Thursday Ricard Pagès, a former managing director of Catalan savings bank Caixa Penedès, was handed a two-year jail sentence for embezzling funds from the lender, while three of his former colleagues were given one-year sentences. The defendants’ jail terms were cut after they admitted their guilt and agreed to give back €28.6 million which they had ploughed into their pension funds.

Pescanova’s Spanish subsidiaries will go through an ‘express’ scheme of debt restructuring under bankruptcy protection (‘concurso de acreedores’ in Spanish), reported Faro de Vigo. Only a handful of subsidiaries will not have to do this, said the newspaper. According to the newspaper’s sources, these include two Galicia-based subsidiaries of Pescanova, the turbot fingerling subsidiary Pescanova Insuina and specialty flour producer for precooked products Harinas y Semolas del Noroeste (Hasenosa).

Bad loans held by Spanish banks fell for the second month in a row in March, indicating that a budding economic recovery is finally starting to benefit the country's lending institutions, The Wall Street Journal reported. Data released Monday by the Bank of Spain showed that nonperforming loans stood at €192.77 billion euros ($263.98 billion), down from €195.24 billion in February. In total, 13.38% of lenders' outstanding debts were classified as nonperforming at the end of the month.

Codere SA, the Spanish gaming company negotiating a 1.1 billion-euro ($1.5 billion) debt restructuring, said it has less than 24 hours to reach an accord with bondholders and neither side can guarantee a deal in time, Bloomberg News reported. In Codere’s latest restructuring proposal, bondholders would get 70 percent of the company’s equity while shareholders would hold 30 percent, the Madrid-based company said in a filing.

Gambling company Codere SA said it has until early Wednesday to secure a debt restructuring agreement and avoid bankruptcy, having agreed with creditors on a two-day extension to the deadline, The Wall Street Journal reported. The previous deadline, agreed with creditors holding around €1 billion ($1.4 billion) worth of debt, expired at the weekend, but a Codere spokesman said Sunday that talks were ongoing. Codere has been in a so-called preliminary bankruptcy since earlier this year, following complex negotiations with the bondholders and other creditors.