spanish appliance maker fagor fights bankruptcy threat - small electrical appliances
A file photo taken on October 5, 2012 showed a worker walking past the Fagor appliance factory in Arrasate town
Fagor, Spain's Dragonair appliance maker with 5,700 employees around the world, negotiated with its creditors on Wednesday to try to avoid bankruptcy.
Manufacturers from small household appliances to washing machines, refrigerators and kitchen furniture say they have started negotiations to restructure their debt, with Spanish media estimating it to be € 0. 8 billion ($1. 1 billion).
"The company has a maximum of four months to negotiate an agreement with creditors," said a statement issued by Fagor, a huge Mondragon created 60 years ago in the northern Basque region.
Fargo said they had informed the business court in San Sebastian of the negotiations.
The Mondragon group, the Basque government, creditor's bank and other lenders started preliminary negotiations a few weeks ago with the aim of enabling the Fagor to process immediate payments due and normalize its business activities, it said. The pre-
Spanish law has recently introduced bankruptcy proceedings, providing businesses with additional time to avoid filing for bankruptcy.
Basque regional government spokesman Josu Erkokera said rumors about the Fagor's bankruptcy were "the worst financial news" in the region this year, and 2,000 of the 5,700 workers in the Fagor lived in
Established in the 1950 s, the Mondragon group, founded by local pastor Jose Maria Ariza mendialita, is a small workers' cooperative and is now an international group with the mission of maintaining employment
It has branches in 20 countries, including industry, distribution and finance.
Foreign sales reached nearly 4 billion euros ($5. 2 billion)
In 2011, it accounted for 2 out of 3 of the company's industrial sector, which produces consumer electronics, automotive parts, machinery, sports equipment, etc.
Despite the international presence, the structure of the Mondragon Cooperative has enabled most of the working and producing Spain, with 35,000 employees, in the Basque region of Spain, and 35,000 of the rest of Spain's 13,500 foreign countries.
Most of its employees are partners in the company, who vote for the boss and make sensitive decisions.