Abengoa files for bankruptcy in U.S.

Source: By Patrick Fitzgerald, Wall Street Journal • Posted: Wednesday, March 30, 2016

Abengoa SA, the renewable energy company that operates around the world, this week filed for bankruptcy protection in the United States.

The Spanish energy company is now in talks with its bondholders and banks in an effort to agree on a restructuring plan for its more than $16.48 billion in debt.

The company filed for Chapter 15 protection, the section of the U.S. bankruptcy code that handles cross-border insolvencies.

Abengoa previously struck a deal with its major creditors that will give it more time to continue restructuring negotiations. The company said it hopes filing for bankruptcy will give it extra time and space for talks.

“It is my belief that the relief requested in the petition and related motions is necessary … to protect the U.S. assets of the petitioning group members and to prevent creditors from taking actions in the U.S. under U.S. law in a way that could frustrate the group’s efforts to agree to a restructuring,” Abengoa lawyer Borja Fernández de Trocóniz said.

Abengoa is one of the world’s foremost builders of power lines that move energy across Latin America. The company is also highly regarded when it comes to engineering and construction of large renewable energy power plants.

The company’s financial woes can be traced back to Spain’s boom years. During that time, Abengoa took out billions of cheaper loans in anticipation of a growth rate that never happened.