Abengoa Rises After Report That Top Shareholder to Be Diluted

  • Shares, bonds advance after report of capital increase
  • Controlling shareholder to take part with 30% of holding

Abengoa SA, the Spanish renewable company that has lost half its market value this year, rose following news that its largest shareholder may be diluted in a capital increase.

Abengoa’s Class B shares climbed as much as 4.2 percent and traded at 89 euro cents at 10:38 a.m. in Madrid, trimming their annual decline to 51 percent. Bonds also advanced.

Share Price
Share Price

Abengoa’s largest shareholder will take part in a capital increase with 30 percent of its current holding, El Confidencial reported today, citing unnamed people close to the discussions. The Seville, Spain-based company said it will raise 650 million euros ($725 million) to bolster its cash position and ease investor concerns over its ability to generate cash and pay debt.

Its 500 million euros of 8.5 percent bonds due in March jumped 3.6 cents on the euro to 73 cents, according to data compiled by Bloomberg. The company’s 550 million euros of 8.875 percent notes due in February 2018 gained 3.9 cents on the euro to 53.5 cents.

Credit-default swaps insuring Abengoa’s debt against default signal a 92.5
percent probability the company will default in five years, down from 94
percent yesterday, according to data compiled by CMA.

Abengoa representatives declined to comment on the story. The holding company, Inversion Corporativa IC SA, couldn’t be reached for comment. Both firms share the same chairman, Felipe Benjumea.

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