The Abengoa general shareholders’ meeting has approved this Tuesday the cessation and rejection of the board of directors of the company for its management of the debt restructuring agreements that it reached with the banks, with which the agreed restructuring remains in the air.
As Abengoa has informed the National Securities Market Commission (CNMV), the meeting, in an extraordinary call at the request of a group of minority shareholders grouped in AbengoaShares, has approved all the proposals, except for the fifth point on the agenda, that of the appointment of new members of the board of directors, which has not been voted on because the documentation did not arrive on time.
AbengoaShares submitted a proposal for an alternative board of directors, which included Marcos de Quinto, former executive vice president of The Coca Cola Company and economic exporter of the Parliamentary Group of Citizens, to preside over the governing body of this company of the Abengoa group.
Voting on this proposal could be done at the meeting that has been called for December 21, in the first call, or for the 22, in the second, and to request its inclusion there is a period of five days from the call of that meeting, which was held yesterday.
The AbengoaShares proposals have gone ahead with the support of 66% of the shareholders who have participated or have been represented in the extraordinary meeting of Abengoa, which has had a 28% stake, sources from this minority group have indicated.
In addition, from the rapproval and removal of the council chaired by Gonzalo Urquijo, Abengoa’s board has approved the revocation of the remuneration policy for the board of directors.
For the group of minority shareholders, it would be “unheard of” if the directors could receive a very high remuneration, in the case of Urquijo of up to 20% of 48 million euros in shares of Abenewco 1, when the restructuring plan does not generate value for Abengoa shareholders.
Abenewco 1, a company that groups together the main businesses and assets of the engineering company, would be the parent company of the group if the debt restructuring is finally carried out.
The shareholders’ meeting has also approved that in the negotiation carried out by Abengoa’s managing body with bond-holding banks, creditors, suppliers and administrations to become part of Abenewco 1, the parent company Abengoa, SA is guaranteed a minimum shareholding percentage of 20% in Abenewco 1, as well as their proportional participation in the administrative bodies.
In addition, the preparation of a new business plan has been approved with an urgent calendar of divestments within a year to meet the payment of the debt.
After the cessation of the board of directors headed by Gonzalo Urquijo, the company’s governing body has become vacant temporarily until the general meeting of shareholders to be held on December 21 or 22.
RESTRUCTURING IN THE AIR
The decision of the shareholders of reproach Abengoa’s board of directors for its handling of the restructuring agreements of debt reached in August leaves these in the air.
In August, the company signed the restructuring with a group of investors and creditors who participate in the financial debt it already had and which was joined by financial entities that have participated in providing it with a new liquidity line.
The deal would make Abenewco will be controlled by the KKR fund and Banco Santander, with approximately 17% and 20% of the capital, respectively, while Abengoa S.A (former shareholders) would go from controlling 5% to having between 3.5% or 2.7%, depending on whether or not Santander exercises a purchase option.
Abengoa’s refinancing, agreed with the bank, revolves around the ICO financing (up to 230 million) and the Junta de AndalucÃa (20 million), although the latter has not yet given its approval.
There would also be up to 300 million in guarantees, the debt of suppliers and creditors (153 million) would be capitalized and the conditions of the bonds would be changed.
Since the board of directors now dismissed, it has been maintained that the operation signed in August was the best and the only one possible to guarantee the viability of the group, and that if it were frustrated, the group would go to bankruptcy (old bankruptcy) .
In addition, on November 6, it warned that creditors who have pledged financing and guarantees to ensure the continuity of the group and its activity will withdraw the financing in the event of a change in the board.
Right now, Abengoa SA is far from saving the bankruptcy that it requested on August 18, for which it has only obtained adhesions for 27.7 million to the plan to convert commercial debt into participative loans that it launched within the pre-bankruptcy that it requested for the group’s parent company and it would subtract 125 million.
Abengoa SA, the parent company of the group, is the holding company and its only activity is to own the subsidiaries that hang from it, and it has been dissolving since May 19, when it shows a negative equity of 388 million .
The pre-bankruptcy situation protects Abengoa until next December 18, but if the equity balance is not restored, it is likely that it will enter bankruptcy proceedings, according to the board of directors to written questions from some shareholders.
Abengoa has undergone three restructurings since 2015 to avoid bankruptcy and since that date it has required more than 10,000 million euros in write-offs and capitalization of debt by its creditors, while the former shareholders have seen their participation diluted by 95%.
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