Abengoa has struck a €1.17bn restructuring deal with its creditors, ensuring the survival of the debt-laden Spanish renewables group after a year of financial turbulence that pushed it to the brink of bankruptcy
In a regulatory statement issued on Thursday, Abengoa outlined the details of the restructuring, which included a debt-for-equity swap for creditors who otherwise face a 97 per cent haircut on their loans. Under the terms of the deal, 70 per cent of pre-existing debt will convert into 40 per cent of Abengoa’s new share capital.
“At the end of the restructuring process, the current shareholders in the company would hold around 5 per cent of the share capital,” Abengoa said in a statement.
Once hailed as a standard bearer for Spain’s high-flying renewables industry, Abengoa was forced to launch insolvency proceedings last November, raising the possibility that it could become one of the country’s largest ever bankruptcies. After years of expansion, the group had built up an €8.9bn debt load, which it was no longer able to service.
Abengoa has since committed to a more focused approach, selling non-core stakes as well as photovoltaic plants in Spain and a wind farm in Uruguay. The group — which in the past both built and owned renewable energy plants — has told investors that it wants to concentrate on designing, building and servicing such installations for outside owners.
In April, a Spanish bankruptcy court gave Abengoa until the end of October to come to a deal with its creditors. Thursday’s announcement outlined the terms of an agreement, although it has not yet been signed and still has to be accepted by 75 per cent of creditors, as required by Spanish law. The company said it would update the markets in a conference call next Tuesday.
Under the terms of the deal, Abengoa will receive €1.17bn in funds, made up of fresh investment as well as the rollover of existing credit facilities. In addition, Abengoa will be able to call on a new credit facility worth €307m.
The group’s new financiers include big name hedge funds and other investors, including Abrams Capital, Baupost Group, Canyon Capital Advisors, Centerbridge, D.E. Shaw, Elliott Management, Hayfin Capital Management, KKR, Oaktree Capital Management and Värde.
Abengoa said it was being advised by Lazard, the investment bank, and Cortés Abogados, a Spanish law firm.