Abengoa Gets Time to Restructure as Judge Backs Moratorium

A Spanish judge approved Abengoa SA’s application for more time to win investor support for a 9.4 billion-euro ($10.7 billion) debt restructuring plan.

The ruling puts a hold on all repayments until Oct. 28 while the Spanish renewable energy company seeks a debt deal. The firm won backing for a standstill from more than 75 percent of lenders last month and the Seville judge’s decision makes that binding on all lenders, Abengoa said in a regulatory filing Wednesday.

Abengoa wants the breathing space to give it time to shore up support for the restructuring plan and avoid becoming Spain’s largest corporate failure. A proposal agreed last month with its main bank creditors and bondholders would give lenders a 55 percent stake in return for providing as much as 1.8 billion euros in new loans. Other creditors would get 35 percent of the company in a debt-for-equity swap and investors would be asked for 800 million euros of new guarantees in return for a 5 percent stake.

Abengoa also said on Wednesday it will deregister its Class-B shares in the U.S., saying the costs and administrative work associated with trading on the Nasdaq and complying with the Securities Exchange Commission regulations outweigh the benefits. It expects to have one share class that will be listed on the Spanish Stock Exchanges as a result of the debt restructuring.

The shares were 3.8 percent higher at 27 euro cents in Madrid after rising as much as 15 percent to 30 euro cents. Abengoa’s 375 million euros of notes due in April 2020 are quoted at 10 cents on the euro, according to data compiled by Bloomberg.

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