Abengoa plans restructuring to avoid insolvency, media report

Spanish renewable energy business Abengoa is planning to restructure its firm, shrink itself by about a third to avoid bankruptcy and potentially sell off its bioenergy arm, according to media reports.

According to media agency Bloomberg, the firm is making the plans to convince creditors it can survive as a smaller company.

Quoting a person familiar with the matter, Bloomberg stated: "The company will reduce revenue by about 30% from the €7.15bn ($7.80bn) it recorded in 2014 while also paring back its geographic reach as part of a viability plan to be presented to banks and creditors, according to the person, who asked not to be named because the decision hasn't been made public.

"The company is also seeking to divest assets without selling its largest subsidiaries."

Last month, Abengoa last month received a €106m euro credit-line from banks to help it get it through the end of the year. It's working with auditors and financial advisers, including KPMG and Alvarez & Marsal, on mapping its debt and outlining a recovery plan.

Abengoa filed for preliminary debt protection on 25 November, which gave it a four-month window to avoid insolvency by reaching an agreement with creditors.

According to Bloomberg, Abengoa will seek to hold on to units including Abengoa Solar and Abengoa Water.

The report also stated that the company will be opening to selling Abengoa Bioenergia because making biofuels is not part of the company's core business. Any sale would hinge on the sorts of offers Abengoa could attract for the unit, Bloomberg stated.