Grupo SOS, the Spanish owner of Carbonell and Bertolli olive oil, is to issue EUR200m (US$272.7m) of new shares in the business in a bid to shore up the company’s debts.

The move, which has led to SOS restating its 2008 accounts, was approved in a board meeting yesterday (10 May), the company told just-food today.

The share issue will help SOS meet the requirements of a EUR994m syndicated loan and comes in the wake of a share scandal that led to the departure of the company’s chairman and CEO.

The SOS board met to discuss the fall-out of the revelation that chairman Jesús Salazar and CEO Jaime Salazar used a loan from the business to buy company shares.

The Salazars then planned to sell the shares to an Arab sovereign wealth fund through a holding company called Condor Plus, a move that had not been approved by the SOS board.

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The two men, who planned to sell a stake to the fund to expand the Tierra Project, a scheme designed to boost olive oil production were dismissed from SOS on 30 April.

A source close to SOS said the Salazars will keep their 28.2% shareholding in the business, while Condor Plus will also retain a smaller stake for the time being.

The source said the share issue would “reinforce” SOS’s funds and allow the business to meet payments under its syndicated loan. It has emerged that SOS has broken some of the covenants under the loan agreement.

“It’s true that there are still some covenants that haven’t been completed and SOS is renegotiating the loan conditions with banks,” the source said.

The group is also looking to reduce its debts through the sale of assets, including its vinegar and sauces business.

“SOS is planning to concentrate its efforts and business just in the oil and rice market and therefore is planning to sell the rest of business units,” the source told just-food.

Following the board meeting, SOS also said the Salazars’ move meant it had made a net loss of EUR190m in 2008 and not the EUR32m profit the group first announced in March.