The chief executive of Spanish renewable energy and engineering group Abengoa stepped down on Friday just two days after the indebted company began insolvency proceedings.
Chairman Jose Dominguez Abascal now takes on an executive role, while outgoing CEO Santiago Seage will continue to be a managing director at U.S. unit Abengoa Yield.
Abengoa Yield Plc, the power plant operator created by Spanish energy firm Abengoa SA, is working with JPMorgan Chase & Co. as it seeks a buyer for its parent company’s stake, according to people with knowledge of the matter.
Abengoa Yield is looking for a buyer for part or all of the 47 percent holding, which may attract interest from other companies in the renewable energy sector, the people said, asking not to be identified because the name of the bank isn’t public yet. The process is still at a preliminary stage, the people said.
Abengoa Yield wants to find a long-term investor to guarantee its sustainability as an independent business after its parent company filed for preliminary protection from creditors. It has mandated a top-tier investment bank to lead the search for a new sponsor, according to a statement Friday. It’s also working on new branding and hiring a new chief financial officer from outside the company.
A representative for Abengoa Yield and Abengoa declined to comment. A representative for JPMorgan couldn’t immediately comment.
Abengoa had been under scrutiny for months as investors fretted over its stretched finances.
A potential partner backed out of a deal to inject more capital this week, pushing the firm into a preliminary phase of insolvency which under Spanish law gives it up to four months to reach a deal with creditors.
Spanish and international banks’ total exposure to Abengoa stands at around 20.2 billion euros, including financing for projects, a source said at the end of September.
The company built up a big debt burden as it took on a number of capital intensive projects.
As well as banks and bondholders, Spain’s government also has exposure to Abengoa of about 415 million euros ($439 million) through various state financing bodies. It is keeping a close watch on a group that employs around 7,000 people in the country alone.
“We think that from a business perspective (Abengoa) is viable, that efforts should be made so that this company … keeps going, and that the errors of the past, especially in relation to its debt, are corrected,” Economy Minister Luis de Guindos told a news conference.
De Guindos said Spanish lenders only accounted for about 40 percent of Abengoa’s bank debt, and that the company owed “a significant” amount of money to suppliers too.
He added that it would be key to try to find an industrial partner for Abengoa.
Source: Reuters & Bloomberg