(MENAFN- AFP) Spanish energy giant Abengoa, struggling under a debt pile of nearly nine billion euros, said late Thursday it had reached a preliminary debt restructuring deal with banks and bondholders.
A Spanish bankruptcy court in March gave the Seville-based company, one of the world's biggest renewable energy firms, until October 28 to finalise its restructuring plan or face going under.
"Today we are in a position to announce that Abengoa has reached an agreement in principle with the Banking Coordination Committee and a group of bondholders and investors regarding the main terms of the financial restructuring proposed by Abengoa," according to a transcript of an address by Abengoa president Antonio Fornieles to a shareholder meeting.
The banking committee Abengoa reached the agreement with is made up of Spain's Bankia, Banco Popular, Santander, and CaixaBank, as well as France's Credit Agricole Corporate and Investment Bank (CACIB).
Under the company's latest plan it would have liquidity needs of 1.2 billion euros, down from the 1.5-1.8 billion euros initially foreseen in March, Fornieles told the shareholder meeting, according to the transcript of his speech released by Abengoa.
The company, which posted losses of 1.2 billion euros ($1.3 billion) last year, is under creditor protection.
The world player in solar and wind power, biofuels and water management has launched a recovery plan that includes the sale of biofuels assets and other non-strategic holdings and job cuts as it seeks to reduce its debt burden which stood at 8.7 billion euros at the end of last year.
A family-owned company founded 75 years ago, Abengoa rose from being a local electrical firm, fixing installations damaged in Spain's 1936-1939 civil war, to a major player in solar energy and other renewables.
But risky bets on biofuels and Spain's cuts to renewable energy subsidies during an economic downturn pushed the company to the edge of bankruptcy.
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