Spain's indebted Abengoa cutting stake in U.S. unit (updated)

Starlog Enterprises

11/12/2014 15:49

MADRID, Dec 11 (Reuters) - Indebted Spanish renewable energy 
and engineering firm Abengoa  ABGek.MC   ABG.MC  said on 
Thursday it was cutting its controlling stake in its U.S. unit 
and shedding some assets as it tries to improve its financial 
structure.  
    The company, which has been struggling with a heavy debt 
pile after its home market went through a deep economic 
downturn, recently came under scrutiny from investors over the 
way it accounts for some its borrowings.  ID:nL6N0T44HL  
    Abengoa said it would sell up to 10.6 million shares in 
Abengoa Yield  ABY.O , its Nasdaq-listed U.S. and Latin American 
power generation arm, in which it has a 64 percent stake.  
    The share offering could cut that holding to just over 51 
percent, Abengoa Yield said in a filing. Abengoa said in its own 
statement that it was not reducing its stake below that 
threshold.  
    In recent weeks, however, Abengoa's management had said it 
would look to sell down its Abengoa Yield holding to below half, 
as this would allow it to remove the debt from the U.S. 
subsidiary from its own balance sheet.  
    A spokeswoman for Abengoa said the company's strategy had 
not changed but that it had a specific timetable to stick to in 
terms of a sell-down. She did not detail the time frame.  
    Having a controlling stake allowed Abengoa to designate the 
majority of Abengoa Yield board members, though the Spanish 
company also said on Thursday it was reviewing the role of 
independent directors at the U.S. unit.  
    Investors were spooked when Abengoa said in its results 
presentation in November that debt issued by one of its other 
subsidiaries, Abengoa Greenfield, was classified as 
non-recourse, meaning it was not included in some debt 
calculations. 
    The Spanish firm had just over 9 billion euros ($11 billion) 
in total net debt at the end of September, including 
non-recourse debt.  
    Abengoa also said on Thursday it was also looking to create 
a joint venture for Abengoa Greenfield and bring in new partners 
who would help it invest in the building of assets.  
    Separately, Abengoa said it was also selling two of its own 
assets to Abengoa Yield, for up to $200 million.  
    Abengoa shares were up 3.7 percent in Madrid at 2.08 euros 
per share, while Abengoa Yield shares were falling 2.5 percent 
to $26.2 at around 1515 GMT. 
    ($1 = 0.8065 euros) 
 
 (Reporting by Jose Elias Rodriguez in Madrid and Robert Smith 
at IFR in London; Writing by Sarah White; Editing by Mark 
Heinrich) 
 ((sarah.white1@thomsonreuters.com; + 34 91 585 2115; Reuters 
Messaging: sarah.white.thomsonreuters.com@reuters.net)) 
 
Keywords: ABENGOA EQUITY/