Abengoa Asks Investors to Extend Maturity of Bonds Due March

  • Company has until March 28 to reach agreement with creditors
  • Trying to restructure 8.9 billion euros of gross borrowings

Abengoa SA is asking holders of bonds due next month for more time as the Spanish renewable energy company tries to restructure its 8.9 billion-euros ($9.8 billion) of gross borrowings.

It’s seeking to postpone repayment of 500 million euros of 8.5 percent bonds due on March 31, according to a company statement on Thursday. The company has until March 28 to reach an agreement with creditors under Spanish bankruptcy law before filing for insolvency.

Abengoa is trying to keep operating after failing to get an equity injection last year. The Seville, Spain-based company said last week it needs 1.66 billion euros over the next two years to stay in business while it pares back geographically and sheds assets. Bondholders including BlackRock Inc., Centerbridge Partners and Varde Partners are working with financial advisers Houlihan Lokey Inc. on a plan to keep it afloat.

“Abengoa continues negotiating with its creditors with a view to reaching an agreement on its financial viability,” according to the company statement.

Creditor Protection

Bondholders have until March 23 to agree to the maturity extension and a vote will take place on March 28, Abengoa said. A majority of holders need to approve the plan, according to the bond prospectus.

If the talks with creditors fail, Abengoa will need to file for full creditor protection, a step that leads to liquidation in more than 90 percent of cases in Spain, according to rating company Axesor. Spanish bankruptcy law prevents it from paying back debt during restructuring talks.

The March notes fell to a record low of 12 cents on the euro this month, according to data compiled by Bloomberg. They dropped to about 20 cents in November, when the company announced it was filing for preliminary creditor protection, from 92 cents in October, when it was negotiating a capital increase.

The company needs 826 million euros of cash in 2016 and 304 million euros in 2017, as well as an additional 525 million euros this year in technical guarantees to allow it to start taking in new orders, the company said in a regulatory filing last week. 

Abengoa Bioenergy, a U.S.-based unit of the company, filed for bankruptcy protection in St. Louis on Wednesday. The division said it owed about $4 billion to unsecured bondholders and about $1.7 billion to various other lenders under different credit facilities.

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