Abengoa Reports $1.3 Billion Loss Amid Insolvency Battle

2016-03-01 09:50:21.707 GMT

By Rodrigo Orihuela and Macarena Munoz

(Bloomberg) -- Abengoa SA, the Spanish renewable-energy company that’s trying to avoid bankruptcy, reported a 1.2 billion-euro ($1.3 billion) loss for 2015 after its business was revalued amid a financial restructuring process.

The Seville-based company dropped to a loss after posting net income of 125.3 million euros the previous year, according to a regulatory filing Monday. The loss was mainly due to “negative impacts” of 878 million euros, related to a “viability plan” developed by adviser Alvarez & Marsal, according to the filing. Revenue dropped to 5.8 billion euros from 7.2 billion euros in 2014, while earnings before interest, taxes, depreciation and amortization slid to 515 million euros from 1.4 billion.

Abengoa is currently under preliminary bankruptcy protection, and has until March 28 to reach an agreement with creditors to restructure its debt. If it fails, it will follow its units in the U.S. and Brazil into court-led insolvency proceedings. The company has been working for weeks with Alvarez & Marsal on a financial restructuring program. In January, it presented a new viability plan under which its revenue would shrink by a third.

“Abengoa’s results are dismal,” said Felix Fischer, a credit analyst at independent research provider Lucror Analytics in Singapore. “They were substantially impacted by filing for preliminary creditor protection. The situation is highly complex.”

Under the plan the company is speeding up the disposal of unwanted assets and has sold the shares of a 100 megawatt thermal-solar power plant in United Arab Emirates, it said in the filing. It has also reached an agreement to sell its former headquarters in Madrid and is studying offers for other non- strategic assets.

About 93 percent of Abengoa’s market value has been wiped out since July 31, when the company downgraded its financial guidance amid investor concerns about the strength of its balance sheet. Since then, it sought to expand a sweeping divestment program and sought in vain to increase its shareholder capital. Amid the upheaval, Felipe Benjumea, a son of the company’s founder and key shareholder, stepped down as chairman.

Abengoa B shares dropped as much as 2.9 percent and were down 1.5 percent at 0.136 euros at 10:16 a.m. in Madrid trading.

They have fallen 30 percent this year.

Abengoa’s gross debt stood at 9.4 billion euros as of Dec.

31, 888 million euros less than a year earlier. The company reduced its total liabilities due mainly to having lost control of Atlantica Yield, which is no longer consolidated in its financial results, according to the filing. Atlantica Yield was formerly known as Abengoa Yield Plc.

Abengoa is in talks with creditors including banks such as Banco Santander SA and HSBC Holdings Plc. The company’s bondholders are being advised by Houlihan Lokey Inc. and Clifford Chance LLP. The group of note holders includes BlackRock Inc., American International Group Inc., Invesco, D.E.

Shaw & Co., Varde Partners LP and Centerbridge Partners LP.

--With assistance from Katie Linsell.