Abengoa starts insolvency proceedings

26 November 2015


Sian Crampsie

Abengoa has announced it is working with creditors to ensure its financial viability after an investor terminated an agreement to inject capital into the group.

The Spanish engineering firm started insolvency proceedings after announcing that Gonvarri, a unit of industrial group Gestamp, had backed away from a plan to inject €350 million.

Abengoa has been trying to find new investors since August, when it announced a plan to cut its high debt levels.

"The company will continue negotiations with its creditors with the objective of reaching an agreement that ensures the company's financial viability," Abengoa said in a statement.

Spanish insolvency laws give firms four months to reach agreement with creditors and avoid a full-blown insolvency process.

If the firm fails to reach an agreement with creditors, it could lead to the largest bankruptcy on record in Spain.

Earlier in November, Abengoa's auditor Deloitte said that the firm's future depended heavily on Gonvarri's proposed investment.

The firm recently won a contract to carry out the engineerin and construction work for a 220 MW cogeneration plant in Abu Dhabi for Emirates Global Alminium.

It has also just inaugurated a pilot plant demonstrating advanced reverse osmosis and membrane distillation technology in partnership with Masdar.

 

 



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