Abengoa unit wins US court nod to join restructuring plan

Abengoa unit wins US court nod to join restructuring plan

CHICAGO: A leading bankrupt subsidiary of Abengoa SA won U.S. court approval on Wednesday to join a US$10 billion debt-restructuring agreement in Spain, a week before a deadline for the renewable energy firm to secure creditor support for the plan.Abengoa, with a global renewable energy footprint, filed for pre-bankruptcy in November in Spain, and will become the largest Spanish corporate failure ever unless 75 percent of its creditors approve a wide-ranging restructuring deal by Oct. 25.Dozens of Abengoa’s subsidiaries filed for U.S. Chapter 11 protection this year and the reorganization of the U.S. and Spanish businesses both depend on the success of the so-called master restructuring plan in Spain, according to lawyers for Abengoa.U.S. Bankruptcy Judge Kevin Carey approved the request by Abeinsa Holding Inc, one of Abengoa’s two main U.S. subsidiaries in bankruptcy, to join the MRA, overruling objections by unsecured creditors who said the deal would give them a recovery of only pennies on the dollar.Meanwhile a group of Abengoa’s main creditors such as Spanish bank Santander and U.S. hedge funds like Oaktree Capital Management will gain control of the company in exchange for over US$1 billion of new cash.Without their investment, Abengoa could be forced to liquidate. This would be even worse for unsecured creditors, some of whom helped finance the construction of one of the world’s largest solar facilities in the Mojave Desert, U.S. lawyers have said.”We’re trying to walk the line of keeping this plan moving forward while respecting creditors’ rights in the United States,” Abeinsa…

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