The Board of directors of Abengoa has decided this Monday to file for bankruptcy hours after the creditor bank canceled the process of restructuring your debt.
We are facing the second largest bankruptcy in Spain, with a debt close to 6,000 million euros (at the end of 2019 it stood at 5,989.7 million), only behind that of Martinsa Fadesa, which added more than 7,100 million euros. The company employs 14,000 workers, 2,500 in Spain.
“The decision has been made to request the declaration of voluntary bankruptcy of Abengoa, S.A. When the factual assumptions provided for in the bankruptcy legislation concur and considering that this measure is the most appropriate to safeguard the interests of the Company and of all creditors. The request has been presented today in the competent court of Seville “, has indicated the company.
“The Board of directorsBeing aware of the complex situation and of the increasing difficulties in reaching a solution that satisfies all stakeholders with positions, up to now, opposed, remains committed to seeking alternatives to avoid the unviability of the subsidiaries that they carry out the group’s activity and, thereby, preserve employment and try to minimize loss of value, an objective for which all those who have interests in the Company and its group are requested to do their utmost to try to avoid definitive damages ” , have indicated.
Despite this, the members of the current council have continued in their positions, waiting for the Justice to appoint a bankruptcy administrator to order payments, restructure the company and carry out asset sales if necessary.
The decision has been taken to avoid the bankruptcy of the company that will face serious liquidity problems after confirming that the rescue negotiated since August cannot be carried out.
The company announced this Monday that it has not been able to obtain the 20 million euros that the Junta de Andalucía nor a new extension to continue trying to obtain them, the key to closing the refinancing agreed by the company with its creditors.
This has generated that the creditor banks cancel the process of restructuring your debt and push the company into a critical situation, with a new bankruptcy and bankruptcy on the table.
This decision has been made a week before the Shareholders’ Meeting in which the ‘rebels’ or minority of Abengoa they had the votes necessary to change the Board of directors and assume the management of the company.
This group of shareholders led by Clemente Fernandez He has indicated to this newspaper that they will continue with their project, although they acknowledge that it will not be easy in the new context.
The declaration of bankruptcy does not block the appointment of a new Board of directors, but the future CEO must submit to the decisions of the bankruptcy administrator, at least for the duration of the process.
Another problem that it will generate for a new management team is the access to company financing. A company in bankruptcy cannot qualify for ICO credits, but it can apply to the rescue fund of the QUIET and to other types of financing.
In any case, the rescue and refinancing plan that was paralyzed this monday it had an important component of ICO loans, an aid that the minorities thought to take up once they had taken over the management of the company.
“The company informs that the financial creditors have not granted the consents requested by the Company to extend again the deadline for the closing and execution of the restructuring agreement (the” Restructuring Agreement “),” explained the company based in Andalusia this morning.
“Since the aforementioned date and until February 19, the closing period of the operation has been extended since the necessary consents to that effect have been obtained at each possible expiration, the Company having worked, at all times and in parallel, in the search for possible alternatives in view of the non-contribution of 20 million euros for the Junta de Andalucía “.
“However, having not obtained a new consent for the extension of the term, the Restructuring Agreement it has been automatically resolved so that the financing operation on its announced date can no longer be executed “.
On August 6, 2020, the company announced a pre-agreement that represented Abengoa’s third rescue since it entered pre-bankruptcy in 2015. Creditors and public administrations committed to inject more than 500 million between guarantees and liquidity. The Junta de Andalucía committed 20 million, but finally did not inject capital.
During the last weeks, the Group has been negotiating to several bands to obtain these 20 million, essential to close the rescue. Even after negotiating with five funds, Abengoa achieved the commitment of one of them to inject 35 million euros.
However, the ICO would be blocking the rescue because it prefers to wait to sign the rescue until the meeting promoted by several minorities, scheduled for March 4, is held. In this situation, Abengoa It did not achieve a new deadline to continue postponing the approval of the rescue already agreed with the creditor banks.
The minority who have opposed the bailout want to expel the current president of the Abengoa, Juan Pablo López-Bravo, and the other counselor Margarida Smith with the aim of putting another rescue plan on the table. A plan that would be hampered by the declaration of the bankruptcy.