Spain Rejects State Aid for Abengoa Unit, Bringing It Closer to Bankruptcy

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The Spanish government has rejected state aid for Abenewco1, a unit of Spanish engineering and energy group Abengoa, moving it closer to bankruptcy proceedings, Reuters reported. The company had requested a temporary state aid package worth 249 million euros ($263 million) to stay afloat while it evaluates a takeover bid from Los Angeles-based private equity fund TerraMar Capital LLC worth 200 million euros. A source from Spain's state vehicle SEPI said that because the viability of the company and the repayment of the loan were not guaranteed, the firm was not subject to state aid. In a statement from Abengoa to Spain's stock market supervisor CNMV after the market close, Abengoa said that SEPI had informed Abeneweco1 that its request had been rejected as certain criteria of eligibility lacked sufficient accreditation. It added that Abenewco1 board directors would meet in the following days to take the necessary actions in the interest of maintaining continued operations and safeguard the various stakeholders of the group. Read more.