Abengoa SA’s bonds and stock tumbled to records after the embattled
renewable-energy company said it was seeking preliminary protection from
creditors following the breakdown of talks with a new investor. Abengoa’s 500 million euros ($530 million) of bonds maturing in March
fell as much as 51 cents on the euro to 12 cents on Wednesday,
while its 550 million euros of bonds due February 2018 dropped as much
as 32 cents to 9.8 cents, according to data compiled by Bloomberg. Its B
shares plunged as much as 69 percent to 28 euro cents.
Abengoa, which employs more than 24,000 people worldwide, has been
seeking to reassure investors that it can generate enough cash to
service its debt pile of about 8.9 billion euros of consolidated gross
debt. The Seville-based company said earlier this month that Gonvarri
Corporacion Financiera, a unit of industrial group Corporacion Gestamp,
would become its biggest shareholder after agreeing to acquire a 28
percent stake by injecting new funds.
“The future of the company seems very black,” said Carlos Ortega, a
trader at Beka Finance Sociedad de Valores SA. “It has a tremendous
amount of debt which no bank wants to refinance and now even its
partners are backing out.” Gonvarri ended the accord because Abengoa failed to meet the conditions set, Abengoa said in a regulatory filing Wednesday.
‘Significant Doubts’
Abengoa reported a nine-month loss this month. Deloitte, the auditor,
said Abengoa’s losses, slumping shares and difficulty accessing
financing could generate “significant doubts” over its ability to keep
operating. “The reaction in the market is huge,” said Felix Fischer, a credit
analyst at independent research provider Lucror Analytics in Singapore.
“A financial restructuring would be a very messy and lengthy process.
There are so many different layers of different liabilities.”
Moody’s Investors Service downgraded the company last week to B3, six
levels below investment grade. The ratings company said the amount of
immediately available cash at Abengoa is “insufficient” and the plan to
raise capital via a rights issue and asset sales may not be enough to
boost liquidity.
“Today is the day many have been expecting,” said Amit Staub, a
portfolio manager at Roxbury Asset Management in London, which doesn’t
own the company’s bonds. “Abengoa has long split the market between
those who love and those who hate the credit, like us, because its
financing is a black box.”
http://www.renewableenergyworld.com/articles/2015/11/renewable-energy-company-abengoa-seeks-protection-from-lenders.html
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