Bankrupt Abengoa in need of fresh funding

Spanish renewables firm Abengoa SA, which last month filed for bankruptcy, is in need of new financing to keep its global operations going.

The company said in a statement yesterday that it is "necessary to close a new financing transaction guaranteeing the stability and future of the group of companies." Abengoa added it has started conversations and negotiations with public institutions and private entities.

Abengoa SA, the parent entity, on Feb. 22 filed for voluntary bankruptcy proceedings at a court in Seville, Spain, as creditors no longer supported a debt restructuring via pre-insolvency proceedings because the firm could not obtain a €20 million liquidity line from the Andalusian government.

Abengoa had liabilities of over €7 billion at the end of March 31, 2020, according to company filings, and the group employs over 13,000 people.

Negotiations to restructure and amend the firm's debt had been going on since 2019, although structural problems go back beyond this date as the group and some of its subsidiaries, including those in the U.S. and Mexico, have been through various rounds of reorganizations.

Last summer, the Spanish government considered granting guarantees and credit lines to keep the company afloat, according to press reports, which said that the Spanish state agency ICO would guarantee up to 70% of the €180 million that bank creditors including Bankia and Santander were considering lending to the company.

Abengoa, which was once part of the Ibex 35 stock market index, warned last July already that a lack of liquidity and guarantees would "severely" affect its business.

In addition to its bankruptcy filing, the Spanish regulator, namely Spanish National Securities Market Commission in February initiated a disciplinary procedure against the company and its board for the offense of failing to report earnings on time.

Meanwhile, in February 2020, the Spanish National Court said it had widened its investigation into Abengoa over alleged accounting fraud before the firm reached an agreement with creditors to restructure its €9 billion debt pile in 2017.

The 2017 deal was the group's first large debt restructuring, completed via pre-insolvency proceedings that it first filed in 2015. This restructuring resulted in creditors taking control of the company. Its second restructuring completed in April 2019 to refinance and amend the previously restructured debt and put new debt securities in place, including new liquidity of up to €97 million of convertible bonds, and additional bonding lines for up to €140 million.

Abengoa offers technology solutions for sustainability in the infrastructure, energy and water sectors.