Abengoa creditors to seek country-by-country solutions to debt crisis

Seville-based energy giant could become Spain’s largest corporate bankruptcy case

Miguel Ángel Noceda
Abengoa's solar plant in Sanlúcar la Mayor (Seville).
Abengoa's solar plant in Sanlúcar la Mayor (Seville).PACO PUENTES

The creditors of Abengoa, the renewable energy giant that is struggling to stave off bankruptcy, are considering a country-by-country solution to the company’s crisis.

The Seville-based firm, which also specializes in engineering, has plants in 16 countries and a commercial presence in more than 80 nations. In 2014, it had over 600 subsidiaries.

Lenders will now consider the best option in each case, from divestment to liquidation, capitalization or write-offs.

It is widely accepted that Abengoa’s US unit, Abengoa Yield, will be totally or partially sold off

This could help the company avoid what would amount to Spain’s largest corporate bankruptcy.

Abengoa is currently sitting on €8.9 billion of gross financial debt and desperately needs to renegotiate with creditors or find a “white knight” investor to pull it out of the danger zone.

The infrastructure development firm filed for preliminary creditor protection in late November and has four months to find a credible solution.

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On Thursday, Abengoa officials were planning to meet with the banks’ negotiating team and ask them for €100 million to deal with December paychecks and other immediate expenses.

This team, which represents Banco Santander, Banco Sabadell, Bankia, CaixaBank, Banco Popular, HSBC and Crédit Agricole, met on Wednesday with Abengoa’s consultant, KPMG, to explore the details of the company’s debt.

The answer will determine creditors’ response to the situation. It is widely accepted that Abengoa’s US unit, Abengoa Yield, will be totally or partially sold off. It is also highly likely that the company will reduce its presence in Brazil, where more than 3,000 jobs stand to be cut. Unions said that over 2,000 Brazilian workers have already been let go, out of a total staff of 5,800.

Abengoa has designed an adjustment plan that seeks to reduce 38% to 40% of expenses by focusing on its least profitable assets. This means making a careful selection of the company’s solar, biomass and co-generation plants, desalination plants and power lines.

English version by Susana Urra

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