Abengoa may exit biofuels

Source: BY DTN/Progressive Farmer • Posted: Monday, February 1, 2016

Abengoa May Exit Biofuels

OMAHA (DTN) — Abengoa SA plans to sell its 370-million-gallon-per-year ethanol business in North America as a part of a restructuring plan presented to government officials in Spain, according to Spanish news organization elEconomista.es (http://www.eleconomista.es).

Abengoa reportedly is seeking about $1 billion for Abengoa Bioenergy, which operates a number of corn-ethanol plants in Nebraska, Kansas, Illinois and New Mexico, and had also launched commercial cellulosic ethanol production at a plant in Hugoton, Kansas. DTN reported at the end of 2015 that Abengoa had laid off employees at the Hugoton plant.

On Monday, Abengoa SA, the parent company of Abengoa Bioenergy, announced in a letter to Spain’s National Securities Market Commission the company was planning to restructure its business to focus primarily on engineering services.

“Based on this plan, the company will negotiate with your creditors for a debt restructuring and the resources necessary to continue trading and operate competitively and sustainably in the future,” Abengoa said in the letter.

In addition, elEconomista.es reported Abengoa SA was selling ethanol and other biofuels plants in Spain, Germany, Brazil and in the Middle East.

It has been reported Abengoa SA is negotiating with creditors on about $8.9 billion in debt.

On Monday, attorneys for Abengoa Bioenergy asked a U.S. District Court for the District of Nebraska to dismiss 10 of 12 claims made by CHS Inc. in a recent lawsuit. That lawsuit alleges Abengoa Bioenergy owes CHS around $5 million for about 2 million bushels of unpaid corn delivered to ethanol plants in Nebraska and Kansas.

CHS Inc., a major corn feedstock provider to Abengoa’s plants in Nebraska and Kansas, said it has not been paid for corn already delivered to the plants starting in July.

Between July 2015 and October 2015, Abengoa purchased at least 4,976,076 bushels of No. 2 yellow corn from CHS and delivered to the Nebraska plants and the corn ethanol plant in Colwich, Kansas, according to the complaint. In all, the complaint alleges Abengoa did not pay for about 1.9 million bushels at a price of about $4.9 million.

“CHS’s amended complaint needlessly complicates this case by asserting 12 separate counts,” Abengoa said in a brief filed with the Nebraska court Monday. “In addition, CHS seeks recovery of its attorney fees in violation of Nebraska’s public policy.”

Abengoa argues the case should be narrowed down to two counts to eliminate “duplicative” claims.

“By dismissing these extraneous and duplicative claims, the parties will be able to more narrowly focus on the true issues present in this case which will streamline discovery and resolution,” said Abengoa’s attorneys.