Abengoa has requested from the Sociedad Estatal de Participaciones Industriales (SEPI) the rescue of its company Abenewco 1, to which it transferred the most valuable assets and activities of the parent company, for an amount of € 249 million, as reported by the company to the National Securities Market Commission (CNMV).
Specifically, the company has submitted to SEPI a request for temporary public support charged to the Strategic Companies Solvency Support Fund, created by the Government to help companies impacted by the Covid-19 crisis and endowed with 10,000 million euros.
The granting of the aid is pending that SEPI and the other competent bodies complete their internal procedures for ‘due diligence‘, which will be carried out in accordance and within the deadlines provided in the applicable regulations and until the final resolution of the submitted application.
In this way, the group seeks to preserve these assets and keep a subsidiary operating in which the company’s business is located and its close to 13,000 employees.
On the other hand, it points out that Abenewco 1, although it has not yet reached a definitive agreement with the different groups of creditors nor has it yet obtained the approval of the different public institutions (SEPI, ICO and Cesce) for this rescue, it raises the operation based on a non-binding offer received from an investor “considering it as the only option currently possible”.
Specifically, Abenewco 1 would propose the implementation of an operation in three successive phases that go through a first phase of interim financing and progress of a new line of guarantees, another of additional financing, closing of the restructuring and availability of the rest of the new line of guarantees , and a third of SEPI financing.
TERRAMAR FUND OFFER
In this sense, the Abengoa subsidiary has received a non-binding offer from a group of investors led by TerraMar Capital LLC, based in the United States, which would consist of providing 150 million euros in the form of a loan and 50 million euros in the form of a capital contribution to Abenewco 1.
The loan of 150 million euros would be divided into two disbursements, an initial one of 35 million euros that would provide Abenewco 1 with liquidity in the short term and an additional 115 million euros that would be subject to the fulfillment of certain precedent conditions.
Once the precedent conditions have been met, Abenewco 1 would carry out a capital increase subscribed by TerraMar for an amount of 50 million euros, with the aim of holding 70% of the share capital of Abenewco 1.
Of course, this financing and investment offer is conditional on the company’s relationship financial institutions providing new financing and new lines of guarantees, in line with the agreements signed and announced in August 2020.
In the first of the phases, according to the group’s new redemption sheet, it would receive 35 million euros in the form of a loan and would have an advance of a new line of guarantees for an initial amount of 40 million euros and it would be planned the signing of a new restructuring contract and the financing commitments in money and guarantees with the guarantee of the ICO and Cesce.
In the second, the execution of the restructuring agreement would imply a change in the capital structure of Abenewco 1, with the main creditors of Abenewco 1 and the new investor becoming shareholders. As a consequence of this, the accounting group of which the company is now parent would be broken and the group would become headed by Abenewco 1.
Additionally, in this second phase, Abenewco 1 would estimate to have available a syndicated bank financing similar to the one signed and announced in August 2020 (ICO financing), with ICO coverage for 70% of the amount, in accordance with the measures approved by the Government of Spain. ± a to support companies affected by the pandemic caused by Covid-19, and a new line of guarantees for an amount of up to 300 million euros as an extension of the progress made in phase one.
Finally, the third phase would consist of closing the announced SEPI financing. The funds obtained with this financing would be used mainly to repay the ICO financing, and the remaining amount would be used for general uses of Abenewco 1, always respecting the limitations and regulations applicable to the financing of the temporary public support that is the object of the request.
“ONLY POSSIBLE OPTION”
Abenewco 1’s board of directors has ensured that the restructuring plan proposed on the non-binding offer received by the investor is “the only possible option” in the current circumstances, for the relaunch of the subsidiary and its group of investee companies.
On February 22, Abengoa SA, the parent company of the group, requested the declaration of voluntary bankruptcy after failing to get the financial creditors to grant it the consents to extend the deadline again for the closing and execution of the restructuring agreement.
The Third Section of the Commercial Instance Court of Seville, in charge of the request for voluntary bankruptcy of creditors formalized by the Sevillian multinational Abengoa after not accepting its financial creditors to extend the deadline again for the closing and execution of the restructuring agreement, declared bankruptcy to the entity three days later.
On August 6, the group had reached an agreement for Abengoa Abenewco 1, which according to the plan – called ‘Vellocino’ – was expected to become the parent company for all the company’s businesses, to sign a loan to five years for an amount of up to 230 million euros for which he requested the ICO guarantee under Royal Decree-Law 8/2020 of urgent and extraordinary measures against the social and economic impact of Covid-19.
The closing of the operation was pending the contribution of the Junta de Andalucía to this rescue of an additional 20 million euros, which was never finalized.
DEBT OF ALMOST 6,000 MILLION
Abengoa’s financial debt at the end of 2019, the last year with data reported by the company -which did so just a week ago with almost a year delay- amounted to 4,783 million euros, although it rose to almost 6,000 million if 1,165 million euros corresponding to debt from projects for sale were taken into account.
The group already avoided in 2017 what would have been the largest bankruptcy in the history of Spain, after being beset by a debt of almost 9,000 million euros.
At the end of 2019, the company’s workforce in the world exceeded 14,000 employees, with around 18% of them, some 2,578 workers, in Spain.
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