The financially troubled international renewable energy pioneer Abengoa, which filed for bankruptcy protection last November, has been granted bankruptcy protection under Chapter 15. This protection has been provided, in spite of the objections of a group of insurance companies claiming the Spanish renewables company’s talks to restructure billions in debt was unfair to US creditors.
On Wednesday, the US bankruptcy court signed off on Abengoa’s bid for protection, recognising its restructuring and locking in a pre-insolvency standstill agreement with key creditors that gives the struggling renewable energy company more time to undertake negotiations on debt restructuring. According to the court, Abengoa’s debts total more than €14.6 billion ($16.48 billion).
The group of insurance companies, which had issued some $250 million in surety bonds linked to Abengoa’s construction of power plants in the US, had attempted to eschew the court’s recognition of the Spanish proceeding. Regardless, under Chapter 15, the Seville-based energy company receives the automatic stay that prevents creditors from seizing assets and halts lawsuits.
Under Abengoa’s $112 million viability plan, the company has already made significant headway in divesting assets by selling four PV plants to Vela Energy, and also sold its 20% share in Abu Dhabi’s CSP plant Shams 1 to Masdar. In addition, the embattled company has received preliminary support from various creditors, with court filings revealing that a group of certain bondholders have considered offering more than $1 billion in new financing to help kickstart the restructuring process.
Image via Abengoa