Spain’s Abengoa Files for Chapter 15 Bankruptcy in U.S.

Abengoa SA has filed for bankruptcy protection in the U.S. as the Spanish energy company continues talks with its banks and bondholders to agree on its plan to restructure billions of dollars in debt, The Wall Street Journal reported. The renewable energy company, which operates around the world, on Monday night filed for chapter 15 protection, the section of the U.S. bankruptcy code dealing with cross-border insolvencies, in U.S. Bankruptcy Court in Wilmington, Del. The bankruptcy filing comes after Abengoa struck a deal with key creditors that gives it more time—through Oct. 28—to continue negotiations on restructuring its debts, which court papers show total more than €14.6 billion ($16.48 billion). The company hopes the U.S. bankruptcy will provide extra breathing room for these talks. “It is my belief that the relief requested in the petition and related motions is necessary…to protect the U.S. assets of the petitioning group members and to prevent creditors from taking actions in the U.S. under U.S. law in a way that could frustrate the group’s efforts to agree a restructuring,” Abengoa lawyer Borja Fernández de Trocóniz said in court papers. Under a restructuring plan floated to creditors earlier this month, which was described in filings with the U.S. Bankruptcy Court, the new Abengoa would cut costs, shed noncore assets and emerge as a slimmer business valued at €5.395 billion with €4.9 billion in debt. Ownership of the restructured company would largely fall to existing creditors and new-money lenders, though the plan envisions current shareholders hanging on to about 5% of its equity. Read more. (Subscription required.)