Abengoa to file for preliminary creditor protection

Source: By Erin Voegele, Ethanol Producer Magazine • Posted: Wednesday, December 2, 2015

Spain-based Abengoa recently announced that it is filing for preliminary creditor protection. The company, however, said it “currently intends to continue to operate its ethanol plants in a normal course of business.” This includes the cellulosic plant in Kansas.

In late November, Abengoa published a notice indicating its previously announced framework agreement with Gonvarri Corporación Financiera, a company belonging to Gonvarri Steel Industries, was terminated, citing a failure to meet certain conditions to which that agreement was subject. Under the agreement, announced Nov. 8, Gonvarri was expected to make a €250 million ($265.9 million) investment in Abengoa. Following news that the agreement was terminated, Abengoa said it “will continue negotiations with its creditors with the objective reaching an agreement that ensures the company’s financial viability, under the protection of article 5 bis of the Spanish Insolvency Law…, which the company intends to apply for as soon as possible.”

In a statement provided to Ethanol Producer Magazine Biomass Magazine, Abengoa said it currently intends to operate its ethanol plants in a normal course of business. “While the York and Ravenna, Nebraska, plants have been idle for a few days (during which time maintenance tasks have been performed) it is our intention to resume operations there within the near future. The Hugoton, Kansas, plant has also been temporarily idled in order to implement various modifications and improvements. The Indiana and Illinois facilities continue to be fully operational, as well as our plants in Europe and Brazil,” said the company.

Abengoa released its third quarter financial results on Nov. 13, reporting revenues of €4.87 billion for the first nine months of the year, with EBITDA of €891 million. Pro-forma net income reached €4 million for the first nine months of 2015 with net income reaching a loss of €194 million.  The company also reported an engineering and construction backlog of €8.8 billion as of Sept. 30.

The company celebrated the grand opening of its Hugoton, Kansas-based 25 MMgy cellulosic ethanol plant in October 2014. In its third quarter financial results, Abengoa said the plant is in a ramp-up phase, which is expected to last through 2016.