Sun, Nov 29, 2015 - Page 13 News List

Abengoa’s fate unknown as boss quits

FREEFALL:The Spanish government said that although it is important for the renewable engergy company to find an industrial partner, European regulations prevent a bailout

AFP, MADRID

Abengoa SA on Friday said that its chief executive, Santiago Seage, had resigned after it emerged the Spanish renewable energy giant was close to bankruptcy, as concerns rise over the fate of a firm that employs close to 29,000 people.

The company announced on Wednesday that a deal with Spanish engineering group Gestamp — which had been due to inject much-needed cash into the firm — had fallen through, leaving it with a mountain of debt and the threat of becoming Spain’s largest-ever corporate failure.

On Friday, it said it had accepted “the resignation of Santiago Seage,” adding that all operational powers would now be in the hands of board chairman Jose Dominguez Abascal.

Gestamp subsidiary Gonvarri had planned to buy 28 percent of Abengoa for about 350 million euros (US$371 million), which would have made it the renewable energy firm’s largest shareholder.

However, the deal fell through and a court in the southern city of Seville — where the company is headquartered — said on Friday it had launched bankruptcy proceedings, which offers Abengoa protection from creditors for up to four months until it finds a solution.

Unions and politicians are increasingly concerned about the fate of the 70-year-old firm, which employs 28,700 people around the world, including 7,000 in Spain.

Spanish politician Alberto Garzon called on the government to rescue the company while the General Union of Workers (UGT), one of Spain’s main unions, urged the authorities to find a solution.

“What we cannot allow — neither Abengoa workers, nor Spanish society, nor the industrial sector of our country — is to let this company disappear,” UGT head Candido Mendez told Cadena Ser radio.

Minister of Economy and Competitiveness Luis de Guindos said it was important for the world player in solar and wind power, biofuels and water management to find “an industrial partner,” but he appeared to reject any bailout of the group.

“Any action by the government will be constructive, but we also have to take into account that there are limits in European regulations with regards to state aid,” he said.

De Guindos said that from “a business point of view, [the company] is viable.”

“Now what is most important is to find out exactly what the accounting and debt situation of the company is,” he said.

Shares in Abengoa have been suspended from Spain’s main IBEX-35 after they went into freefall.

Various bank creditors of Abengoa are to meet creditors KPMG on Monday, a source involved in the talks said on Friday.

The creditors plan to discuss the next steps to take in the restructuring the company’s debt with the consultancy after they named KPMG their adviser in the process, two sources said.

KPMG declined to comment.

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