Abengoa Creditors Near Taking Control as Shareholders Back Plan

Abengoa SA shareholders approved a 9 billion-euro ($9.6 billion) debt-restructuring plan, putting creditors a step closer to taking control of the Spanish renewable-energy producer.

Under the program, creditors will get as much as 95 percent of the Seville-based company, according to a statement late Tuesday. That confirms the retreat of the founding Benjumea family, who agreed to reduce their stake earlier this year.

Creditors have also agreed to inject 1.17 billion euros into Abengoa following a two-year saga first triggered by concerns about financial transparency. The company filed for preliminary creditor protection a year ago after a failed attempt to raise new capital.

“We continue to have our doubts about the long-term viability of the new company,” said Felix Fischer, head of research at Lucror Analytics in Singapore. “Substantial risk remains that the company will not manage a turnaround.”

Abengoa’s 500 million euros of March 2021 bonds are quoted at 3 cents on the euro, down from 36 cents a year ago, according to data compiled by Bloomberg. 

Creditors will get 50 percent of Abengoa in exchange for the cash injection. They can also swap 70 percent of debt into a 40 percent stake, with the rest of the borrowings being replaced with new debt instruments. Alternatively, they can accept a 97 percent loss. The company will also give a 5 percent stake to investors in return for as much as 307 million euros in new guarantees.
 

2016-11-23 11:51:23.10 GMT

By Katie Linsell