Spain's Abengoa on the brink as creditors lose patience

Creditors refuse to extend deadline on restructuring talks

  

MADRID- The future of troubled Spanish engineering and renewables company Abengoa hung in the balance on Monday after creditors refused to extend talks on a restructuring agreement.

A proposed restructuring to tackle Abengoa's 6 billion euro ($7.3 billion) debt mountain has unravelled since the regional government of Andalusia withdrew an offer of 20 million euros in funding as part of the overall deal.

Since September Abengoa has repeatedly postponed the deadline to complete negotiations while it scrambled for alternatives to the Andalusia funding, but its creditors appear to have run out of patience.

"In the absence of renewed consent to the deadline extension, the restructuring agreement has been automatically terminated," Abengoa said in a market statement on Monday.

The board will meet immediately to decide how to best protect the company's interests, the company added, without saying when the meeting would take place or what could be decided.

A spokesman for the regional government said that Andalusia did not have adequate tools to inject direct aid for the company.

A spokesman from the Budget Ministry declined to comment on whether Abengoa could be entitled to receive help from a 10 billion euro fund that focuses on bailing out companies in strategic sectors.

In 2016 Abengoa narrowly avoided becoming Spain's largest corporate bankruptcy after striking a deal to refinance 9 billion euros of debt, handing control of the company to an assortment of banks and investment funds.

The Seville-based business, which employs about 13,500 people, had borrowed heavily in the preceding decade to fund an aggressive expansion into clean energy from its traditional expertise in designing and building infrastructure projects.

By the end of 2019 - the most recent period for which complete figures are available - Abengoa's total debt was 5.95 billion euros.

After cutting annual losses to 549 million euros in 2019, from nearly 1.5 billion euros in 2018, the COVID-19 pandemic has brought fresh troubles, stalling new projects and forcing the company back into talks with lenders.

Abengoa eventually secured a complex preliminary deal that would have seen most of its assets transferred to a holding company, which would in turn receive 230 million euros in state-backed loans. But that has now collapsed. 

Trading in Abengoa's shares has been suspended for months. ($1 = 0.8241 euros)

(Reporting by Nathan Allen and Jes?s Aguado Editing by Ingrid Melander and David Goodman) ((n.allen@thomsonreuters.com; +34 617 792 131;))


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