Abenewco 1 (Abengoa) requests 249 million from SEPI and confirms that Terramar will keep 70% of the capital

Abenewco 1 (Abengoa) requests 249 million from SEPI and confirms that Terramar will keep 70% of the capital

The operation seeks to completely clean up the structure of the company and give entry to the capital to new investors and creditors.

Archive image of the Abengoa headquarters.

New turn at Abengoa. The company has requested this Wednesday 249 million euros from the Support Fund for the Solvency of Strategic Companies of the Spanish Society of Industrial Holdings (SEPI) for your subsidiary Abenewco 1within the framework of the financial debt restructuring plan.

Abenewco 1 is the most important subsidiary and the jewel in the crown of Abengoa, since it brings together the most valuable assets of the Andalusian company. The objective is to save this company from bankruptcy, unlike what happened with its parent company a couple of weeks ago.

In the same way, the company informs that it continues to work on an alternative solution in order to be able to close a new financial operation that guarantees the stability and future of the group of companies in the perimeter of Abengoa.

A move that aims to turn Abenewco 1 in the matrix of the company after cleaning up Abengoa, the current array. The new company would be born with a new majority shareholder -the opportunistic fund Earthsea– and owned by bank creditors.

In this way, Abengoa has communicated the existence of a non-binding offer by a group of investors led by TerraMar Capital LLC (“TerraMar”). Said offer would consist of providing 150 million euros in the form of a loan and 50 million euros in the form of a capital contribution to Abenewco 1.

Earthsea Fund Entrance

The loan of 150 million euros would be divided into two disbursements, an initial one of 35 million euros that would endow Abenewco 1 of short-term liquidity, and an additional 115 million euros that would be subject to the fulfillment of certain precedent conditions.

Once completed, Abenewco 1 would carry out a capital increase that would subscribe Earthsea for an amount of 50 million euros, with the aim of holding 70% of the share capital of Abenewco 1.

Said financing and investment offer is conditional on the company’s related financial institutions providing new financing and new guarantee lines, in line with the agreements signed and announced in August 2020.

However, the granting of the aid is pending that the SEPIand the other competent bodies, complete their internal procedures of due diligence, which will be carried out in accordance and within the periods established in the applicable regulations and until the final resolution of the submitted application.

In the same way, Abengoa pending the resolution of the Court of Commercial Instance authority on the designation of insolvency administration, and ensures that no measure is being proposed that affects it, the proposal that will now be presented being that the Board of Directors of Abenewco 1 has agreed for said company and its group of investees.

public aid

On the other hand, Abenewco 1, although it has not yet reached a definitive agreement with the different groups of creditors nor has it obtained the approval of the different public institutions (SEPI, ICO and CESCE) for the implementation of the operation that will now be carried out, “proposes the operation on the basis of a non-binding offer received from an investor, considering it as the only possible option at present”.

Abenewco 1, “In line with the objective of guaranteeing financial and business stability, as well as to guarantee the employment and continuity of it and its group of companies, I would propose the implementation of an operation in three successive phases.”

In the first place, an interim financing and advance of a new line of guarantees is requested with which Abenewco 1 would receive 35 million euros in the form of a loan and would have a new line of guarantees for an initial amount of €40 million. On the other hand, the signing of a new restructuring contract and the financing commitments in money and guarantees with the guarantee of the ICO and CESCE.

new array

In the second phase of the operation, Abenewco 1 would estimate to implement a new restructuring agreement in line with the agreement signed and published in August 2020, applying certain changes and modifications to the debt instruments currently in force, which would imply in any case capitalizations and write-offs and making the appropriate modifications to include the execution of investment transaction for TerraMar.

The execution of the restructuring agreement would imply a change in the capital structure of Abenewco 1becoming shareholders the main creditors of Abenewco 1 and the new investor. As a consequence, the accounting group of which the company is now the parent would be broken up and the group would be headed by Abenewco 1.

The last phase of the designed financial operation would consist of closing the financing requested from SEPI. These funds would be used mainly to repay the ICO financing, and the remaining amount would be used for general purposes of Abenewco 1always respecting the limitations and regulations applicable to the financing of the temporary public support object of the request.

Ellsworth Weber