Spain's Abengoa sacks chairman to ease debt talks

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Spain's renewable energy giant Abengoa, battling with bankruptcy, on Wednesday said it has dismissed its chairman to make urgent debt negotiations easier.

Abengoa's board relieved chairman Jose Dominguez Abascal of his duties six months early at the request of main shareholder Inversion Corporativa (IC), owned by the Benjumea family which founded Abengoa, it said.

The board named Antonio Fornieles Melero, previously vice-chairman, in his place "with the prime objective of facilitating an agreement with the company's creditors", the statement said.

Abengoa is on a March 28 deadline to restructure its debt and avoid bankruptcy. If it goes under, it would be one of Spain's biggest corporate failures ever.

"The creditors wanted to break the link with the previous management," a source close to the debt negotiations told AFP.

Fornieles Melero joined Abengoa last year, having previously worked for auditors KPMG, the firm that was asked by creditor banks in December to proceed to a full audit of Abengoa and its subsidiaries.

"My appointment is one of the demands made by the creditors," Fornieles Melero was quoted by online news site as saying. "We are confident that we can find an agreement quickly," he added.

But Spread Research corporate debt analyst Maxime Kogge said the smart money was on creditors pulling the plug on Abengoa, driving it into insolvency.

Even with lower debt and asset sales Abengoa "does not seem viable. It is still very cash-hungry and has very high financing needs", he said.

The change at the helm comes a day after Abengoa reported a 1.2-billion-euro ($1.3 billion) loss for 2015.

In November the world player in solar and wind power, biofuels and water management announced it was close to bankruptcy following years of unsustainable expansion and filing for protection from creditors.

In September Abengoa had already sacked a chairman, Felipe Benjumea, who is the founder's son and ran the company for 25 years.

On Wednesday, the company also terminated Benjumea's role as consultant which he has held since his departure as chairman.

© 2016 AFP

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