* Abengoa agrees restructuring outline with main creditors
* Deal would see banks, bondholders take control
* Unclear how many overall creditors have signed up
* Company to hold conference call on Aug. 16
(Writes through, updates shares, adds quote)
By Axel Bugge
MADRID, Aug 10 Indebted renewable energy firm
Abengoa said on Thursday it had reached a
restructuring deal with its main creditors that will hand them
control of the company, as it tries to avoid becoming Spain's
biggest ever bankruptcy.
Seville-based Abengoa - an engineering business which
borrowed heavily over the past 10 years to fund an aggressive
expansion into clean energy - has been negotiating since
November with lenders to try and cut its debt of over 9 billion
euros ($10 bln).
It has yet to draw a line completely under a tumultuous 12
months, heralded by unsuccessful attempts to carry out a rights
issue last August that eventually led it into pre-insolvency
Abengoa said in a statement on Thursday that negotiations
with a group of investors and creditors, including banks, had
led to "a deal on the terms and conditions for the restructuring
of its financial debts and its recapitalisation."
The agreement, however, needs to be ratified by 75 percent
of creditors by the end of October in order to avoid bankruptcy,
under Spanish law. The company did not specify if it had reached
that threshold, adding that it would hold a telephone conference
with investors on Aug. 16. A banking source familiar with the
talks said the company hoped to reach that threshold by the
first week of September.
A spokeswoman for the company declined to comment.
Once the restructuring is finalised, control of Abengoa will
be transferred from its founding family, with about 90 percent
of the ownership going to banks and bondholders.
Its new owners - a mix of banks such as Santander
and funds specialised in distressed debt, like Elliott
Management and KKR Credit - will also have to keep the company
on a stable footing as it shrinks and refocuses on core
businesses such as construction.
It has already been gradually shedding assets in recent
months, including a fibre networks subsidiary which it sold to
Sweden's Ericsson for an undisclosed amount.
"It's a positive step, and hopefully it means the business
can continue," CreditSights analyst Andrew Moulder said of the
"The engineering and construction side of Abengoa is a
reasonably good business to be in, and if the financing is done
on a sustainable basis the main obstacle is getting everybody to
sign up and getting the requisite approvals in time."
SHARES JUMP, THEN SLUMP
Abengoa shares jumped 9.9 percent at the market open on news
that a deal had been reached, but were down 4.5 percent by 1230
GMT as investors took profits after recent gains in anticipation
of an agreement.
The deal will provide the company with much-needed cash,
after its finances have been so stretched over recent months
that it has failed to pay some wages on time.
It will now get a total of 1.17 billion euros in cash -
including some already granted to tide it over in recent months
- and a further 307 million euros in financial guarantees.
Abengoa said it had offered creditors two options under the
restructuring deal. The company would convert 70 percent of
outstanding debts into equity, and refinance the remaining debts
over six years, in return for 40 percent ownership of the
restructured company. The family would also relinquish another
50 percent in the company to new investors.
Alternatively, 97 percent of the company's financial debt
would be written off and the remaining 3 percent would mature in
10 years without interest payments.
Creditors hope to present the court with the finalised
restructuring by the first week of September, the banking source
familiar with the talks said, adding that Abengoa also had to
call a shareholder meeting to ratify the deal.
The company plunged into a 340-million-euro loss in the
first quarter. It has not yet published second quarter results,
but can still do so by the end of September.
($1 = 0.8970 euros)
(Additional reporting by Sarah White and Jose Elias Rodriguez;
Editing by Susan Fenton)