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Abengoa Insolvency Filing Marks Spain’s Biggest Company Failure

Abengoa Insolvency Filing Marks Spain’s Biggest Company Failure

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Spanish Renewable Energy Firm Files for Insolvency

Renewable energy group Abengoa SA filed for insolvency late on Monday, after its latest attempt to restructure its debts fell apart.

The parent company of the renewable-energy producer, which is the entity that filed for insolvency, had around 1 billion euros ($1.22 billion) of liabilities in 2019. The group as a whole had 7.9 billion euros in liabilities as of March 31, according to its latest earnings statement.

The board of directors is seeking alternatives to ensure the subsidiaries that carry out the group’s activities remain viable, the company said in the filing.

On Tuesday, the Spanish regulator initiated a disciplinary procedure against the company and its board for the offense of failing to report earnings on time.

Abengoa reached a deal with its creditors in August to restructure its debt and obtain additional liquidity. The agreement fell apart on Monday after it failed to secure 20 million euros from Andalusia’s regional government.

A company spokeswoman declined to comment. Once a darling of the renewable energy industry and part of the Ibex 35 Index, the company avoided insolvency in 2016 by restructuring about 9 billion euros of debt. The company ran into trouble because of cash shortages following a global expansion drive. About 19% of the company’s 13,500 employees are based in Spain.

(An earlier version of this story corrected the size of the liabilities of the parent company that filed for insolvency, and removed reference to filing representing Spain’s largest insolvency.)

Source: bloombergquint
Anand Gupta Editor - EQ Int'l Media Network