Spain's Abengoa wins creditors' backing

  • 28/03/2016
Spain's Abengoa wins creditors' backing

Spanish energy firm Abengoa has won the backing of around 75 percent of its creditors to restructure its high debt load and seek more time from a court for talks aimed at avoiding bankruptcy.

The company, struggling under a €9.4 billion debt pile, is in pre-insolvency talks and would become Spain's largest bankruptcy if it failed to reach an agreement with lenders and bondholders.

Abengoa had until March 28 to win the backing of at least 60 percent of them and convince a Seville court to give the firm an additional seven months to reach the 75 percent creditor acceptance threshold for a wide-ranging debt restructuring plan.

"We have won the backing of 75 percent of financial creditors when we needed 60 percent to present a standstill agreement," said one of Abengoa's most-senior executives in an email sent on Sunday to other senior staff and which was seen by Reuters.

"Tomorrow at 0900 the agreement will be presented to the court in Seville," he also said.

Abengoa declined to comment.

Sources familiar with the talks had told Reuters earlier this week that more than 60 percent of creditors were expected to back a debt restructuring deal reached on March 9 by Abengoa and its main banks and bondholders.

Abengoa would also receive a new cash injection of €137 million to pay wages and providers, the sources added.

Under this deal, some creditors would lend up to €1.8 billion to the company over a period of five years, giving them the right to 55 percent of the restructured company.

Simultaneously, around 70 percent of existing debt would be swapped for equity, giving those other creditors the right to 35 percent of the company, Abengoa said.

Creditors who advanced an additional 800 million euros in financial guarantees to develop projects would get 5 percent of the restructured company.