UPDATE 1-Spain's Abengoa plans legal action over energy reform

Fri Feb 22, 2013 1:24pm EST

Related Topics

* 2012 net profit falls 50 percent

* Halts investments in Spain after energy reform

* Sees 2013 EBITDA at 1.35-1.4 bln euros vs 1.24 bln in 2012 (Recasts with plans for legal action against energy reform)

MADRID, Feb 22 (Reuters) - Spanish renewable energy and engineering firm Abengoa is planning to take legal action against the Spanish government over its latest energy reform, the company said, after posting a 51 percent fall in 2012 profit.

Cash flows for Abengoa, which builds and installs thermosolar units among other services, will be hit by Spain's decision to cut premiums for renewable energy and implement a 7 percent tax on generation, analysts have said.

The energy reform, aimed partly at curbing a 28 billion euro power tariff deficit created after years of selling electricity at a loss, has stoked the fury of renewable energy companies and the investors who poured money into their projects.

Abengoa, which aims to list on Nasdaq, said in a results presentation on Friday it was planning "legal action against the government on its own and in coordination with the rest of the sector".

Foreign funds have already threatened legal action against the government under an energy treaty meant to protect their investments, but Spanish companies have little form of recourse because the laws were passed as decrees.

Abengoa reported a 50 percent decline in net profit to 125 million euros ($165 million) in 2012 from a year earlier and said it was suspending new investments in Spain following the latest reforms.

It expected earnings before interest, tax, depreciation and amortisation (EBITDA) to rise to between 1.35 billion and 1.4 billion euros this year from 1.24 billion in 2012. ($1 = 0.7598 euros) (Reporting by Carlos Ruano; Writing by Tracy Rucinski; Editing by Julien Toyer and Jane Baird)

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