Spain’s Abengoa wards off bankruptcy with creditor deal

Spain’s energy giant Abengoa, struggling under a billions-strong debt pile, said Thursday it had reached a deal with creditors and investors allowing it to ward off bankruptcy.

The renewable energy firm had until October 28 to strike a debt restructuring agreement after announcing last year that it was filing for preliminary protection from creditors following years of frenzied, unsustainable expansion.

In a statement, the company said it had struck “a deal… on the terms and conditions for the restructuring of its financial debt and its recapitalisation” with creditors such as Banco Popular and Santander bank and investors like KKR Credit.

Under the agreement, the company will be given a much-needed liquidity boost of 1.17 billion euros.

The world player in solar and wind power, biofuels and water management has already launched a recovery plan as it seeks to reduce its debt burden which stood at 8.7 billion euros at the end of last year.

This includes the sale of biofuels assets and other non-strategic holdings, as well as job cuts.

The company, which posted losses of 1.2 billion euros last year, has shed more than a third of its global workforce since the beginning of 2016.

A family-owned company founded 75 years ago, Abengoa rose from being a local electrical firm, fixing installations damaged in Spain’s 1936-1939 civil war, to a major player in solar energy and other renewables.

But risky bets on biofuels and Spain’s cuts to renewable energy subsidies during an economic downturn pushed the company to the edge of bankruptcy.

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