The judge has the final say in deciding what future Abengoa is heading for. Before August 1st, you must decide whether to give the green light to the agreement presented by Clemente Fernández, representative of the shareholders of the parent company, in order to avoid the liquidation of this company and pull the entire group. Or, on the contrary, it leaves the way open to the creditors’ plan, based on the separate sale of certain subsidiaries.
Abengoa is found in a similar way to these Choose Your Own Adventure books. On the one hand, there is the proposal put forward in extremis by Clemente Fernández, CEO of Abengoa SA and representative of his group of shareholders, according to which the creditors will assume a haircut of 97% in exchange for the arrival of two investors, RCP and Sinclair Capital, the pledged to inject 200 million and provide contracts and deals to save the Andalusian group.
The judge has already ordered the parent company’s preliminary liquidation, which would mean the removal of the board of directors and EY, designated as receiver, would take over. Fernández presented arguments for this decision and at the same time an agreement. Now the judge, who already has an opinion with EY’s opinion on the matter, must decide whether to agree to this proposal or definitely demand the liquidation of the matrix.
However, this matrix is an empty shell of productive assets. These were transferred to a subsidiary, Abenewco 1, as part of the bailout plan presented by creditors in the summer of 2020, which failed due to resistance from the Andalusian government to contribute the equivalent 20 million.
If the judge gives the green light to Fernández’s proposal, a trial would open until September 1 for creditors to join the agreement. According to the sources consulted, the intention of the creditors is to reject this agreement because of the high reduction involved. This would bring Abengoa to the exit box in a month in liquidation.
The problem, according to some sources, is that if the money doesn’t come in, it’s likely that the group won’t exist by then. The main problem is a 50 million embargo imposed by the Treasury Department, which could result in the company losing several contracts, precisely where most of the company’s value lies.
The other alternative is for the judge to dismiss Fernández’s allegations and his rescue plan outright. Then the timetable that the creditors have outlined in the past few weeks would come into play.
After SEPI refused to bail out the company, 27 subsidiaries that group the most valuable assets of the Sevillian company filed for creditors’ pre-bankruptcy. This meant a four-month protective shield so that creditors could not apply for embargoes and had time to negotiate.
In this case, the solution is for investors to submit bids for specific business areas after the liquidation of the parent company. Terramar, the California fund that made a $200 million bid to take over the company in exchange for a SEPI injection of public money, is among those preparing bids to keep parts of Abengoa, leaving it doomed would be.
- Government. The Ministry of Industry and the Junta de Andalucía recently agreed with the company to seek a solution for the Andalusian company once the parent company went into liquidation. They also agreed to create a working table, which has only met once so far, to delineate the scope of the company (subsidiaries) to be rescued. However, any contribution of public aid must be guaranteed by Brussels, under a policy that allows states to support struggling companies. According to the sources consulted, the role of Industry Minister Reyes Maroto is currently to mediate with the Treasury to avoid embargoes that will complicate the future of the group.