Bankrupt Spanish renewable energy company Abengoa SA‘s subsidiary was seeking court approval for more time to control its restructuring case, saying that it was not currently in position to fully evaluate claims against it or prepare a reorganization plan.
Abengoa Bioenergy US Holding LLC said in court papers it needs a 120-day extension to its exclusivity period to give it until 21 October 2016 to file a reorganization plan.
Abengoas Netherlands based subsidiary Abengoa Bioenergy Netherlands BV, filed for bankruptcy on Wednesday and shut its ethanol plant in Rotterdam.
The parent company of the Dutch subsidiary had also filed for bankruptcy in April 2016.
The Europoort ethanol plant, Abengoa’s largest in Europe, had a processing capacity of about 380,000 tonnes/year.
The company has appointed Borsboom & Hamm as its administrators, overseeing the bankruptcy proceedings.
Spanish renewable energy firm Abengoa, which is engaged with lenders, planned to undertake certain measures which could impact about 10% of its workforce.
The company employs around 5,000 workers in Spain and some 17,000 worldwide.
Spanish renewable energy firm Abengoa S.A. was granted bankruptcy protection from creditors amid objections from a group of insurance companies who claimed that the company’s debt restructuring talks was unfair to U.S. creditors.
Previously, Abengoa had entered into a pre-insolvency standstill agreement with key creditors that gave the company time until 28 October 2016 to continue negotiations on restructuring its debt, which as per court papers, totals more than €14.6bn ($16.48bn).
However, a group of insurance companies, including Liberty Mutual Insurance Co., AIG and Zurich American Insurance Co., which had issued $250m in surety bonds tied to Abengoa’s construction of U.S. power plants, called the Spanish proceeding “manifestly contrary” to U.S. public policy because it forced them to abide by a standstill agreement without due process.
The insurance firms were arguing that the Spanish restructuring proceedings should only be recognized if they were identical to a U.S. bankruptcy proceeding.
With the approval from the U.S. Bankruptcy Court, Abengoa would receive all the benefits of U.S. bankruptcy law, including the so-called automatic stay that halts lawsuits and prevents creditors from seizing assets.
The court of Seville has granted Abengoa S.A. an additional seven months until 28 October 2016 to strike a deal with lenders and avoid bankruptcy.
Creditors would contribute €1.8bn over the next five years in exchange for a 55% stake in the company.
Further, 70% of existing debt would be swapped for equity, giving other creditors a 35% stake in the company.
Creditors who infused €800m into the company as financial guarantees to develop projects would end up with a 5% stake in the restructured company.
China State Grid Corp. has shown interest in acquiring Abengoa S.A.’s assets under construction in Brazil.
Officials from the state-owned firm visited Abengoa’s energy transmission project sites in Brazil which are under construction to evaluate a takeover.
According to sources, these assets comprise of Abengoa’s portfolio of assets whose construction had stalled last year when the firm ran into financial problems.
Sources further stated that the Brazilian government wanted to avoid a piecemeal sale of Abengoa’s Brazilian assets to avoid delays. Some of the major assets include a major transmission line linking the Belo Monte hydroelectric dam in the Amazon to consumer markets.
State Grid has invested more than $1bn in Brazil’s energy sector since 2010.
Abengoa has about 6,000 kms of transmission lines which are under construction, requiring billions of dollars in investments.
Further, the company has debts of more than BRL 800m ($218m) with equipment suppliers in the country, according to the electricity industry association Abinee.
Spanish renewable energy firm Abengoa S.A., commenced sale of its 70mw Campo Palomas wind energy farm in Uruguay to Invenergy Wind LLC for a total consideration price of $37.5m which it would utilize to pay off debt on the plant. The company had outlined this plant as part of its planned divestitures.
Abengoa would continue constructing the $49m plant which was awarded by state-owned firm Electric Power Plants & Transmissions (UTE). Commercial operations at the plant would commence by February 2017.
Invenergy secured financing from Inter-American Investment Corp. DNB served as mandated lead arranger and a participant in the B-loan. Voltiq advised the company on the debt transaction.
Spain-based renewable energy company Abengoa S.A.’s subsidiary Abeinsa Holding, along with 13 affiliated debtors filed for Chapter 11 protection with the U.S. Bankruptcy Court in the District of Delaware (lead case number 16-10790).
The company is represented by R. Craig Martin of DLA Piper. Documents filed with the court state that global slowdown, distress within the energy sectors and a over leveraged balance sheet led to the filing of bankruptcy.
Parent company Abengoa S.A. itself filed for Chapter 15 protection on 28 March 2016. The company had received backing from 75% of its lenders, 15.04 % more than the required threshold of 60%, to approve its restructuring plan.
Abengoa would present, as part of its restructuring, a plan to file Chapter 11 bankruptcy for all its affiliates in the United States and Chapter 15 for all affiliates to apply for creditor protection and a homologation of the agreement in the US. This move would permit the company to complete the Financial Viability Plan that has already been accepted by lenders.
Further, Abeinsa Holding’s Chapter 11 filing follows the 24 February 2016 Chapter 11 filing of Abengoa Bioenergy U.S. Holding and affiliated debtors. Abeinsa Holding’s Chapter 11 petition indicates total assets greater than $1bn.
Spanish energy company Abengoa S.A won approval from 75% of its lenders to restructure its debt of €9.5bn.
The company, currently in pre-insolvency, would have become Spain’s largest ever bankruptcy if it had failed to reach an agreement its lenders.
Abengoa, which needed backing from 60% of its lenders before 28 March 2016, would now present this approval to the Spanish court as it seeks more time to avoid bankruptcy.