Abengoa Yield Slumps as Biggest Shareholder Abengoa Falters

  • Parent of U.S.-traded yield company seeks creditor protection
  • Abengoa Yield planning to change name, according to a report

Abengoa Yield Plc, the renewable-energy holding company formed by Abengoa SA, fell to a record low after its corporate parent said it’s seeking protection from creditors.

The U.S.-traded company plunged 12 percent to $15.28 at the close in New York, the lowest price since its initial public offering in June 2014, when the shares debuted at $29.

Abengoa, Spain’s largest renewable energy developer, formed the holding company to buy and operate completed power plants. It’s Abengoa Yield’s biggest shareholder with a 47 percent stake, according to data compiled by Bloomberg.  

Abengoa’s bonds and shares fell to records Wednesday after talks with a new investor failed to produce an agreement, raising concerns about its ability to service about 8.9 billion euros ($9.4 billion) of consolidated debt.

Abengoa Yield is considered a so-called yieldco, created to buy and operate power plants, and provide capital for the developer to build new projects. The yieldcos get assets that generate steady long-term revenue from selling electricity, and use part of that to fund dividend payments to investors.

While the model has become common for renewable-energy developers, it’s fallen out of favor in recent months. Shares in U.S.-traded yield companies have slumped as investors question their ability to continue raising cash for new investments through share sales.

In a move to distance itself from the liquidity concerns at its parent company, Abengoa Yield may be considering changing its name, according to a report earlier this month by El Economista.

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