Abengoa restructuring approval date announced; proceedings to be filed

By Caroline Salls

Pittsburgh, Sept. 26 – Abengoa, SA’s restructuring agreement related to its €750 million euro-commercial paper program was signed and granted by public deed before the Notary public of Madrid, by the company, a group of its subsidiaries and a group of financial creditors that will also be participating in the new money and new bonding facilities, according to a news release.

Abengoa said the accession period to the agreement will now open for the remaining financial creditors. Once the accession period is finalized and after obtaining the support of creditors representing at least 75% of financial debt, as required by Spanish Bankruptcy Law, the company will apply for judicial approval of the agreement.

The agreement calls for a 97% debt reduction from the face value of most of the debtor companies, while keeping the remaining face value after the reduction with a 10-year maturity from the date on which the restructuring is completed, with no annual coupon or option for capitalization.

Alternative terms

These terms will be applied to unsecured creditors of the company and its Spanish subsidiaries that did not accede to the restructuring agreement or that did not specifically choose the offered alternative restructuring terms.

Under the alternative restructuring terms, 70% of pre-existing debt will be capitalized in exchange for 40% of Abengoa’s new share capital, and the remaining 70% will be refinanced through new debt instruments with maturities of 66 and 72 months respectively, with the possibility of an extension of up to 24 months, accruing annual interest of 1.50% with 0.25% cash payment and 1.25% “pay if you can.”

The junior instrument could be subject to additional reductions, provided that total reduction does not exceed 80% of the face value before the capitalization, if the total amount of refinanced pre-existing debt exceeds €2.7 billion because of contingencies.

Once the judicial approval request has been filed, a Company Voluntary Arrangement (CVA) proceeding will be initiated in England and Wales at the request of Abengoa Concessions Investments Ltd., and various U.S. bankruptcy procedures will be filed at the request of various U.S.-based subsidiaries.

Under the restructuring accession notice, the deadline for noteholders to sign and execute the agreement is Oct. 25. The accession period for remaining creditors will be open from Sept. 26 to Oct. 25.

Judicial confirmation request

According to a separate release, Abengoa, Abengoa Finance, SAU, Abengoa Greenfield, SA and Abengoa Greenbridge, SAU invited outstanding bondholders to execute the restructuring agreement.

Those issuers said they reached an agreement with a group of their principal financial creditors on the terms and conditions of the overall restructuring of their existing financial debt, which is required under a viability plan for the continuity of the group as a going concern.

Subject to obtaining the support of the requisite majorities of financial creditors as established under applicable laws and regulations, Abengoa said some of its creditors holding financial claims intend to apply for judicial confirmation of the restructuring agreement.

In accordance with the Spanish Insolvency Law, judicial confirmation will be binding upon all the relevant creditors of financial debt, including those who do not enter into the agreement.

Shortly after the judicial confirmation filing date, Abengoa said it intends to apply for local recognition procedures, approval by guarantee creditors to extend the standard restructuring terms to the guaranteed debt of non-consenting creditors and the approval of a Chapter 11 plan under which non-Spanish debt owed by going-forward companies will be restructured.

The accession deadline is Oct. 25, and the record date for noteholders to participate will be Oct. 18.

Abengoa is an industrial and technology group based in Seville, Spain. It filed bankruptcy on March 28 in the U.S. Bankruptcy Court for the District of Delaware under Chapter 15 case number 16-10754.

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