Abengoa boost as creditors back restructuring plan

Troubled Spanish renewables group Abengoa has secured approval from the 75% of creditors it requires to secure a so-called "standstill contract", designed to give it more time to help stave off bankruptcy.

The Seville-based concentrating solar power (CSP) specialist had needed the backing of lenders by Monday morning in order to secure the standstill contract which should allow it more time to persuade the market that its restructuring plan is viable.

Last week Abengoa raised €137m ($153m) in emergency loans in order to cover immediate obligations. The creditor approval secured on Monday means it can now push forward with plans which include slashing its €9.4bn debt pile.

Analysts suggested the news of the creditor approval also meant Abengoa looked much more likely to win the level of backing it needs in order to push forward with a full restructuring of the company.

That process includes a plan to file for bankruptcy protection in the American courts for its US affiliates, said Abengoa.

“This key step in the restructuring process of Abengoa will permit the company to complete the Financial Viability Plan that has already been accepted by lenders in order to stabilise business and protect its leadership in the energy and environmental sectors,” the company said in a statement.

Abengoa sought protection from its creditors under Spanish law in November 2015 after a planned €250m ($277m) investment fell through.

The company claims it has been damaged by the Spanish government’s energy reforms which severely cut subsidies for renewables firms after a boom in the sector.