Abengoa, the Spanish champion of renewable energy, won seven month period of its creditors for its restructuring. Bankruptcy of the Andalusian group, saddled with a debt of 9.4 billion euros, would be the largest in the history of the country.
Abengoa sees a ray of sunshine at the end of the tunnel. The Spanish Renewable Energy Specialist said Monday it had obtained a respite of seven months to carry out its restructuring. The group founded in 1941 that employs 28,700 people in 80 countries, had declared in late November balance of pre-deposit, the equivalent of a backup procedure. After conducting all-out investment, it is saddled with a debt of 9.4 billion euros, almost double its revenues (down by 23%) last year. Its bankruptcy would be the largest in history in Spain.
The Andalusian group had proposed in mid-March to the holders of its -mainly debt of Spanish banks, but also the agricultural credit and the establishment British HSBC – to sign a procedural standstill clause which provides for a suspension of the advance sale of their holdings for a period of seven months. They were 75.04% to join, so it required a minimum of 60% to register this compromise by the Commercial Court of Seville.
“This is a key step in Abengoa restructuring process that allows the company to carry out (its) economic and financial viability plan,” said the Spanish group said in a statement. This project, already approved by major creditors, provides primarily a debt reduction to 4.9 milliars euros.
Abengoa also has plans to restrict its activities and should sell, among other assets in biofuels and seawater desalination plants. It will also ask its affiliates in the United States are under the protection of bankruptcy (Chapter 11) to try to keep particular gem, a giant solar plant in Arizona.
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