Spain’s Abengoa wins US bankruptcy court protection

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit
Share on email
Email
US Judge Kevin Carey ruled on Wednesday that Abengoa's standstill agreement applies to US creditors. Source: Abengoa

Abengoa, which entered insolvency proceedings last November, has been granted bankruptcy protection under Chapter 15 over the objections of a group of insurance companies who claimed the Spanish renewables company’s talks to restructure billions in debt was unfair to US creditors.

The insurance companies – including Zurich American, AIG and Liberty Mutual – called Abengoa’s ongoing restructuring talks with financial institutions in Spain “manifestly contrary” to US policy because it required them to adhere to a standstill agreement without due process.

On Wednesday the US bankruptcy court signed off Abengoa’s bid for protection, recognising its restructuring and locking in a pre-insolvency standstill agreement with key creditors that gives the struggling renewable energy company more time to undertake negotiations on debt restructuring. According to the court, Abengoa’s debts total more than €14.6 billion (US$16.48 billion).

The group of insurance companies, which had issued some US$250 million in surety bonds linked to Abengoa’s construction of power plants in the US, had attempted to eschew the court’s recognition of the Spanish proceeding. Regardless, under Chapter 15, the Seville-based energy company receives the automatic stay that prevents creditors from seizing assets and halts lawsuits.

Under Abengoa’s US$112 million viability plan, the company has already made significant headway in divesting assets by selling four PV plants to Vela Energy, and also sold its 20% share in Abu Dhabi CSP plant to Masdar. In addition, the embattled company has received preliminary support from various creditors; with court filings revealing that a group of certain bondholders have considered offering more than US$1 billion in new financing to help kick-start the restructuring process. 

Read Next

PV Tech Premium
September 15, 2021
Record-breaking power prices across Europe have turned the spotlight on the role fossil fuel plants play in generating electricity and how the transition to renewables-plus-storage could lower consumer bills.
PV Tech Premium
September 13, 2021
Following the release of the US Department’s Solar Futures Study, Liam Stoker assesses the downstream and upstream trends that must be realised for US solar to fulfil its potential.
September 7, 2021
Supply disruptions in the coal and gas sectors have contributed to record electricity costs across Europe, leading to calls for more support for renewables generation to mitigate future price rises.
PV Tech Premium
September 1, 2021
Spain’s renewables auction next month is set to receive high levels of interest from solar bidders, according to industry observers, as the country’s government seeks to support the swift deployment of new capacity following a summer beset by record-breaking electricity prices.
August 25, 2021
The US renewables sector has welcomed the House of Representatives’ approval of a budget resolution that provides the framework for a US$3.5 trillion spending package.
August 24, 2021
Energy advisory DNV has acquired the consulting arm of Chile-based energy price forecaster Antuko, taking aim at the Latin America and Iberia power markets.

Subscribe to Newsletter

Upcoming Events

Solar Media Events
October 6, 2021
Solar Media Events
October 19, 2021
BRISTOL, UK
Solar Media Events
December 1, 2021