Abengoa has requested from the Strategic Companies Solvency Support Fund managed by the Sociedad Estatal de Participaciones Industriales (SEPI) the rescue for its company Abenewco 1, to which the Sevillian company, in bankruptcy, transferred the assets and activities most valuable of the womb. The company has requested a total of 249 million euros from this fund.
Five controversial points in Abengoa’s call for help
“The granting of the aid is pending that SEPI, and the other competent bodies, complete their internal due diligence procedures, which will be carried out in accordance and within the terms provided in the applicable regulations and until the final resolution of the submitted application “, he explains in a note sent to the National Securities Market Commission (CNMV).
In parallel to this request, Abengoa explains that Abenewco 1 has received a non-binding offer from a group of investors led by the US firm TerraMar Capital LLC. Said offer would consist of providing 150 million in the form of a loan and 50 million of capital to Abenewco 1.
The loan would be divided into two disbursements, an initial one of 35 million that would provide Abenewco 1 with short-term liquidity, and an additional 115 million subject “to the fulfillment of certain conditions.” Once completed, “Abenewco 1 would carry out a capital increase to be subscribed by TerraMar for an amount of 50 million”, with the aim of holding 70% of the capital stock of Abenewco 1.
“This offer of financing and investment is conditional on the financial institutions of the company’s relationship providing new financing and new lines of guarantees, in line with the agreements signed and announced in August 2020,” he explains to the CNMV.
With the request for help from the State rescue fund, advanced by Cinco Días, the Sevillian group seeks to preserve these assets and keep a subsidiary operating in which the company’s business and its nearly 13,000 employees are located. The fund, created by the Government last summer to help companies impacted by the Covid-19 crisis, is endowed with 10 billion euros. So far, requests from some thirty companies have transpired.
A week ago, Abengoa already announced that it was working on an alternative solution, for which it had entered into conversations and negotiations with public institutions and private entities whose participation was “essential” to guarantee its viability.
The company decided to extend until March 31 the limit to reach a debt restructuring agreement with the suppliers of the group headed by Abengoa Abenewco 1, after obtaining the majority support of the suppliers. Previously, the Minister of Industry, Commerce and Tourism, Reyes Maroto, already indicated that the Government was “working” to be able to rescue Abengoa and asked the Junta de Andalucía to assume its responsibility.
On February 22, Abengoa SA, the parent company of the group, requested the declaration of voluntary bankruptcy after failing to get the financial creditors to grant it the consents to extend the deadline again for the closing and execution of the restructuring agreement.
The Third Section of the Commercial Court of Seville, in charge of the application, declared the entity in bankruptcy three days later. This Wednesday, the president of the CNMV, Rodrigo Buenaventura, explained that “in the next few days” he will propose to that court a shortlist of possible insolvency administrators after receiving about 45 proposals.
In August, the group reached an agreement for Abenewco 1 to subscribe a five-year loan for an amount of up to 230 million for which it requested the ICO guarantee under Royal Decree-Law 8/2020 of urgent and extraordinary measures against social impact and economic the Covid-19.
Abengoa added to the 230 million loan a five-year revolving line of guarantees for an amount of up to 126.4 million, extendable to 300 million, classified as a new line of guarantees. The closing of the operation was pending the contribution of the Board with an additional 20 million that finally did not contribute.
Abengoa’s financial debt at the end of 2019, the last year with data reported by the company -which did it just a week ago with almost a year of delay- amounted to 4,783 million, although it rose to almost 6,000 million if they were taken into account 1,165 million corresponding to debt from projects for sale.
The group already avoided in 2017 what would have been the largest bankruptcy in the history of Spain, after being beset by a debt of almost 9,000 million.
At the end of 2019, the company’s workforce in the world exceeded 14,000 employees, with around 18% of them, some 2,578 workers, in Spain.