Abengoa's bioenergy arm files for bankruptcy in US

Spanish renewable energy business Abengoa has announced that its US bioenergy unit has filed for Chapter 11 bankruptcy.

The company made the announcement on Wednesday (24 February). According to news agency Reuters, the firm's US bioenergy unit has current liabilities worth $10bn.

The filings do not include Abengoa's corn ethanol plants in Mount Vernon, Indiana, and Madison, Illinois, the cellulosic ethanol plant in Hugoton, Kansas, or certain other subsidiaries of Abengoa Bioenergy.

"Abengoa Bioenergy believes that this action is in the best interests of the company, the plant employees, and the creditors of each of the affected companies," Antonio Vallespir, President and CEO of Abengoa Bioenergy, said in a press statement.

"Filing and consolidating the cases in St. Louis will provide for a more efficient and less costly administration of these cases in one location, and gives our companies the potential to resume operations and generate revenues at the more profitable of these facilities.

"It also provides the opportunity for a coordinated and supervised reorganisation or sale process, while still allowing each involved debtor company substantial control over its own costs, debts and assets."

The six subsidiaries filing for Chapter 11 bankruptcy include Abengoa Bioenergy of Nebraska, which specialises in bioethanol, Abengoa Bioenergy Co. , Abengoa Bioenergy Trading US, Abengoa Bioenergy Engineering & Construction and Abengoa Bioenergy Outsourcing. The subsidiaries have moved for joint administration of the cases under the Chapter 11 case of Abengoa Bioenergy US Holding.

Abengoa Bioenergy is a subsidiary of Abengoa, a holding company headquartered in Seville, Spain. The company filed for preliminary creditor protection in Spain before the end of 2015.

"Abengoa is currently in the process of negotiating a viability plan for the global organisation of the company and aims to maintain business activity in all areas," Vallespir said. "Under Spanish law, Abengoa is in the process of restructuring its debt through a process that protects the company from claims from creditors. These changes are expected to streamline operations and maximize resources."