Spain’s Abengoa replaces chairman to help restructuring deal
Source: By Reuters • Posted: Wednesday, March 2, 2016
The Seville-based energy firm is racing to reach an agreement with its banks and bondholders by March 28, when it would risk a full-blown insolvency process after piling up debts of almost 9.4 billion euros ($10.2 billion).
Antonio Fornieles Melero will become executive chairman to replace Jose Abascal, the company said in a statement to Spain’s stock exchange regulator.
Abascal had been appointed only in November and was seen as a front man for Abengoa’s top shareholder and former chairman Felipe Benjumea.
Two sources with knowledge of the matter said the move had been prompted by the lenders as a prerequisite for talks on a potential debt deal and a new cash injection to move forward.
“It was a big stumbling block. It’s a big step towards a deal. Now the two sides will be able to discuss controversial issues such as the (debt) haircut and what the shareholders are left with,” said one of the sources on condition of anonymity.
Shares in Abengoa, which have plunged 97 percent since their September 2014 peak, rose sharply on the announcement. They were up 8 percent at 0.147 euros at 0900 GMT.
Abengoa started out 70 years ago as a business to design and make electricity meters and now operates solar power plants and has renewable energy projects spanning four continents.
But its aggressive expansion into the clean energy business since 2007 has been fuelled by taking on huge debts, which brought the company to its knees this year when its lenders refused to extend credit lines.
It said on Monday its gross corporate debt at the end of 2015 totalled 9.395 billion euros, up from 8.903 billion euros at the end of September and 18.2 times its operating income.
It had a net loss of 1.2 billion euros in 2015. ($1 = 0.9208 euros) (Reporting by Julien Toyer and Jose Elias Rodriguez; Editing by Keith Weir)