Grupo Isolux Corsan SA won creditor approval for a 2 billion-euro ($2.2 billion) debt-restructuring plan, paving the way for a Spanish court to authorize the program.
The engineering company received backing from almost 90 percent of creditors and it intends to ask the court to impose the plan on other bondholders, according to a statement on Thursday. Under the proposal, 1.4 billion euros of debt will be turned into convertible instruments, giving creditors 95 percent of the restructured company. Existing shareholders will retain 5 percent.
Isolux is also close to selling some Brazilian power lines and a solar-power business, people familiar with the matter said last week. The Madrid-based company is trying to shrink operations and restructure debt after running into trouble through rapid international expansion.
“The company has probably got a fresh start with this deal,” said Jayanth Kandalam, a senior credit analyst at Lucror Analytics in Singapore. “The progress Isolux has made with the restructuring seems to have helped push ahead the asset sales talks.”
Isolux will keep between 550 million euros and 750 million euros of debt on its balance sheet following the restructuring, which will follow a Spanish court process known as homologacion judicial. The company will also get money from banks, including 50 million euros that has already been provided and 150 million euros that will come alongside the restructuring. A further 75 million euros may follow.
The engineering company will appoint a new board of directors, with Nemesio Fernandez-Cuesta as chairman. Antonio Portela will remain as chief executive officer.
Isolux’s 850 million euros of 6.625 percent bonds due in April 2021 were little changed at 16.5 cents on the euro, compared with 72.5 cents a year ago, according to data compiled by Bloomberg.