From Don Quijones at wolfstreet.com:
Financial Fallout Spreads.
Abengoa Bioenergy US Holding filed for Chapter 11 bankruptcy on Wednesday, listing up to $10 billion in total liabilities, including an unsecured leveraged loan of $1.45 billion and unsecured bonds of $3.85 billion. It didn’t list its secured debts. The filing was prompted by involuntary bankruptcy petitions by three US grain suppliers, which claim to be owed more than $4 million in unpaid invoices – million with an “m,” that’s how out of money this outfit is.
The suppliers had reportedly been told by the company that its Spanish parent, Abengoa SA, which controls the “central treasury,” had run out of cash, Reuters reports. And they cited concerns that “the U.S. business was transferring cash and loan proceeds to Abengoa SA.”
Even by recent standards, Spain’s teetering green-energy giant Abengoa SA has not had a good week. First, its former President, Felipe Benjumea, and former CEO, Manuel Sanchez Ortega, faced the indignity of standing trial for malfeasance over the exorbitant payoffs they awarded themselves just months before the company hit the wall. In Sánchez Ortega’s case, he is also accused of sharing insider information about Abengoa’s finances with his new employer, the world’s biggest investment fund, BlackRock [read: The Mother of All Shorts].
During testimony, Sánchez Ortega claimed that it was pure coincidence that BlackRock had placed a sizable short position against Abengoa just weeks after hiring him, one of the few people with first-hand knowledge of the true state of the company’s accounts. Benjumea told the court that the only problem Abengoa suffers from is a liquidity pinch.
That’s right: the sole reason why the Seville-based company has had to file for preliminary bankruptcy and is just one month away from going down in history as Spain’s biggest ever corporate failure is that it’s a little short on cash at the moment.
It is, one assumes, the same reason why Abengoa is begging bondholders for an extension on the repayment of €500 million ($551.5 million) of bonds maturing next month.
To plug Abengoa’s “liquidity” shortfall, all the firm needs is €1.66 billion of fresh debt over the next two years, while it sheds assets and stages a tactical retreat from some of its key global markets, including Brazil and Mexico where it has left behind a vast trail of unpaid debt, cancelled operations, and unemployed workers.
The Spanish firm’s creditors, which include the so-called G7 group of banks (Santander, HSBC, Caixabank, Bankia, Popular, Sabadell and Crédit Agricole) who are owed over €5 billion, and its senior bondholders, including international investment firms like AIG, Invesco, D.E. Shaw, Varde Partners, Centerbridge Partners and Blackrock (no, seriously), are not too enamored with the idea of pouring a further €1.6 billion of “enhanced liquidity” down Abengoa’s bottomless pit.
To continue reading: Investors, Creditors Getting Demolished by this Global Renewables Giant
