Abengoa Jumps on Naming Partner for $9.5 Billion VentureKatie Linsell
Abengoa SA jumped the most in seven weeks after the Spanish renewable energy company said it plans a joint venture with EIG Global Energy Partners LLC to invest in projects under construction.
Abengoa’s Class B shares climbed 11 percent to 2.1 euros in Madrid. The Seville-based company’s 5.5 percent bonds issued through its Greenfield finance unit rose 1.9 cents on the euro to almost 87 cents, the highest in more than a month, according to data compiled by Bloomberg.
The companies together plan to invest more than $9.5 billion in equity and non-recourse debt in a portfolio of power projects. Those will include renewable-energy installations and transmission lines, some of which are in North and South America, according to a statement today from Abengoa. EIG, a Washington-based investment firm, will hold a majority stake in the new company.
The deal is currently undergoing due diligence with a goal to signing a binding agreement by the end of the month, Abengoa said.
The company’s bonds are recovering from record low prices set in November when there was investor confusion over about how Abengoa accounted for some of its debt.
Abengoa Chief Executive Officer Manuel Sanchez Ortega told Bloomberg last month that a possible joint venture for its Abengoa Greenfield unit would allow the company to move non-recourse debt off its balance sheet.