Abengoa Sells U.S. Ethanol Plants for $357 Million 

Source: By PATRICK FITZGERALD, Wall Street Journal • Posted: Wednesday, August 24, 2016

Spanish renewable energy firm Abengoa SA has sold five of its Midwestern U.S. ethanol plants for $357 million as the company looks to stave off what would be Spain’s largest-ever corporate bankruptcy.

Green Plains Inc. of Omaha, Neb., which operates 14 plants and has an ethanol-marketing unit, is paying $200 million for Abengoa plants in Mount Vernon, Ind., and Madison, Ill., according to papers filed in U.S. Bankruptcy Court in St. Louis. Green Plains also topped Houston-based BioUrja Trading LLC, an ethanol-marketing firm that doesn’t have production operations, for Abengoa’s York, Neb., plant with a $37.4 million bid at bankruptcy auction Monday.

An affiliate of plant operator KAAPA Ethanol LLC of Minden, Neb., is paying $115 million for Abengoa’s Ravenna, Neb., plant. And ICM Inc. is picking up Abengoa’s shuttered plant in Colwich, Kan., for $3.15 million.

Abengoa is one of the world’s top builders of power lines transporting energy across Latin America and a top engineering and construction business, making large renewable-energy power plants in places from Kansas to the U.K. The company is operating under a form of pre-bankruptcy protection in Spain where it is in talks with creditors to restructure billions of dollars in debts, which court papers show total more than €14.6 billion ($16.48 billion).

Abengoa pumped more $3.3 billion into the U.S. market, focusing on solar, ethanol and water projects. The company has been shopping the U.S. business for months as part of a global restructuring effort to unload assets that aren’t part of its core business. The renewable energy company will seek U.S. court approval of the sales at an Aug. 29 hearing in St. Louis.

Abengoa has been negotiating with creditors since November to avoid becoming Spain’s largest bankruptcy. Earlier this month, the company said a group of investors including Centerbridge Partners LP, Elliott Management Corp. and Oaktree Capital Management LP had agreed to inject €1.17 billion into the debt-laden company. In exchange, the investors will receive up to a 50% stake in Abengoa’s equity.

Last week the Seville, Spain-based company said it expects at least 75% of creditors to approve its restructuring plan by Sept. 30.

Spanish bankruptcy law requires three-quarters of creditors to ratify a restructuring plan.

Abengoa’s financial woes can be traced back to Spain’s boom years, when the company began to build such projects for itself, fueled by cheaper bank loans and a desire to expand. The company took on billions of dollars in debt in anticipation of a growth rate that never materialized.