Risk

U.S. Units of Spain’s Abengoa File Bankruptcy

The company has invested more than $3 billion in renewable energy projects in the United States.
Matthew HellerFebruary 25, 2016

U.S. subsidiaries of Abengoa SA have filed for bankruptcy protection as the troubled Spanish renewable-energy company faces a critical deadline in its own fight to avoid becoming Spain’s largest corporate failure.

One of the six subsidiaries, Abengoa Bioenergy US Holding LLC, listed a $1.45 billion syndicated loan and $3.85 billion in bonds as unsecured debt in its filing in the U.S. Bankruptcy Court in St. Louis. It did not list secured debt, but said total liabilities could be as much as $10 billion.

Reuters said the Chapter 11 filing was prompted by involuntary bankruptcy petitions against two subsidiaries earlier this month by grain suppliers, which claim to be owed more than $4 million and said they were told Abengoa Bioenergy had run out of cash.

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The suppliers “cited concerns that the U.S. business was transferring cash and loan proceeds to Abengoa SA,” Reuters reported.

The parent company is one of the world’s top builders of power lines transporting energy across Latin America and a top engineering and construction business, making massive renewable-energy power plants from Kansas to the United Kingdom.

In November, Abengoa SA filed for preliminary creditor protection, giving it a four-month window to find a buyer or continue talks with creditors. In the third quarter, it reported gross financial debt of 8.9 billion euros.

Abengoa has until March 28 to agree on a wide-ranging restructuring plan with its banks and bondholders, without which it could be forced to declare bankruptcy. It announced last week it needs about $1.3 billion in cash over the next two years as part of a restructuring that would include refocusing on its core engineering and construction businesses.

In the United States, the company has invested more than $3 billion in renewable energy projects, including several utility-scale concentrated solar power projects. The Department of Energy provided a federal loan guarantee of $1.45 billion for Abengoa’s Solana project in Arizona.

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