Abengoa shareholders comfortable up to EUR 650m raise but launch could slip to October – sources
Abengoa’s [BME:ABG] controlling shareholders are comfortable with the level of dilution implied by an EUR 650m capital increase, but would be reluctant to support a larger fundraise, said a source, a banker and a person familiar with the issue.
If the Spanish construction and engineering company needs to raise more cash, it could ramp up asset sales while keeping the capital increase fixed at this level, said the source and the banker. One option would be to sell down more shares in Abengoa Yield [NASDAQ:ABY], the source said.
Abengoa denied a Bloomberg report on 14 August which stated banks were advising the Seville-based company to raise up to EUR 800m. A week later, a Reuters report stated the cap hike could go up to EUR 1bn. But the idea remains to go for exactly EUR 650m, the person said.
The engineering group aims to launch the capital increase in September, although this might slip to October, said the source and the person. The deal has many “moving parts”, which makes it hard to pin down a more specific timeline, the source said.
Appetite from new anchor investors will be the key to the equity raise, and underwriters need visibility on this issue, the source said. Discussions with investors and prospective underwriters are running in parallel, the person said. HSBC, Santander and Credit Agricole have reportedly signed a standby underwriting agreement.
The fundraising is likely to be very similar to FCC’s [BME:FCC] 2014 EUR 1bn capital increase. The family of Mexican magnate Carlos Slim acted as an EUR 500m anchor investor. He dislodged Esther Koplowitz – the heiress of the founder – as the largest shareholder in Abengoa’s peer.
The Benjumea family controls Abengoa with 57.5% of the voting rights and has pledged to “participate in the capital raise with new money”. The shares are held through two vehicles, Inversión Corporativa (51.3%) and Finarpisa (6.2%). Abengoa has A and B shares, which is unusual in Spain.
Abengoa's A-shares have traded in a 52-week range of EUR 1.41-EUR 4.92; the more numerous B-shares' range is EUR 0.70-EUR 4.73.
One objective of the capital increase is to stabilise the often volatile stock, the source said. The company needs to explain its business model well to shareholders in roadshows, the source added.
The company expects to raise at least EUR 500m through asset sales by the end of the first quarter, the press reported at the beginning of August. Most will be sold to Abengoa Yield, which operates a portfolio of renewable energy assets, as reported.
Abengoa planned to keep its holding in the yieldco at a floor of 40% if it financed any acquisitions through equity issues, Manuel Sanchez, CEO of the parent company, told this news service in February. However, the company might choose to further reduce its stake if necessary, the source said.
A spokesperson for Abengoa declined to comment. The Benjumea family could not be reached for comment.