Abengoa Said to Be Reviewing Creditors' Restructuring PlanLuca Casiraghi, Macarena Munoz and Katie Linsell
Abengoa SA’s management is reviewing the terms of a debt restructuring presented by creditors in a bid to avoid insolvency, according to a person with knowledge of the matter.
The renewable energy company’s chief executive officer and chairman are discussing the proposal with their advisers on Wednesday, said the person, who asked not to be identified because the discussions are private. Bondholders and bank lenders agreed a plan in principle to overhaul the company’s 9.4 billion euros ($10.3 billion) of gross borrowings in exchange for control of 95 percent of the restructured company, other people familiar with the proposal said.
Abengoa has to reach an agreement with creditors by March 28 and present a restructuring plan to a court in Spain to avoid insolvency proceedings under Spanish law. The Seville-based company, which filed for preliminary creditor protection in November after failing to raise funds from shareholders, will reduce its geographical reach and shed assets to focus on its engineering and construction business, the company said in a presentation in February.
An external spokeswoman for Abengoa at Grupo Albion declined to comment on the debt talks.
Current shareholders, including the majority-owner Inversion Corporativa IC SA representing the founding Benjumea family, will retain 5 percent of the restructured company, according to the people with knowledge of the proposal. As part of the plan creditors will inject at least 1.2 billion euros of new money, the people said.
The plan needs approval from at least 75 percent of creditors as well as agreement from the company to be accepted by the court.
Abengoa’s bond investors including BlackRock Inc., Centerbridge Partners and Varde Partners are advised by Houlihan Lokey Inc. and Clifford Chance. Bank lenders including Banco Santander SA and HSBC Holdings Plc are advised by KPMG and law firm Uria Menendez. Abengoa is advised by Lazard Ltd. and Alvarez & Marsal.
Abengoa’s Class B shares dropped 13 percent to 0.31 euros in Madrid trading on Wednesday. Its 500 million-euro bonds due on March 31 gained 4 cents this week and are indicated at 17 cents on the euro, according to data compiled by Bloomberg.