Spain

Spain's Abengoa needs 450 million euros ($496 million) in liquidity, adviser KPMG said in a meeting with creditor banks late on Wednesday although banks said the company needs less, a source present at the talks told Reuters. Abengoa, trying to avoid becoming Spain's biggest-ever bankruptcy, is negotiating a multimillion-euro lifeline with creditor banks which have asked the company to guarantee it with new assets.

In a related story, Bloomberg News reported that Abengoa SA’s filing for preliminary creditor protection constitutes a bankruptcy credit event that will trigger payouts on some derivatives insuring its debt, according to the International Swaps & Derivatives Association. ISDA’s determinations committee, a group of 15 dealers and money managers that govern the market, said that credit-default swaps on updated 2003 contracts will be triggered, according to a statement on its website. Contracts using 2014 terms won’t pay out.

Spain's industry minister criticised energy and engineering group Abengoa on Friday for handing out multi-million euro payoffs to executives in the months before the indebted company entered into pre-insolvency talks with creditors, Reuters reported. Jose Manuel Soria said executives at Abengoa, which could face Spain's largest-ever bankruptcy, had not invested wisely, given the financial cost of the group's accumulated debt was far greater than its cash flow and income.

Spanish power and engineering group Abengoa, in pre-insolvency talks to avoid becoming Spain's largest ever bankruptcy, has stakes in almost 900 subsidiaries and partnerships, a report said on Thursday, Reuters reported. The complexity of Abengoa highlights the difficulty faced by creditors of the Seville-based renewable energy firm to understand the extent of its debts, one of the first tasks they face as they embark on restructuring talks.

Creditor banks of Abengoa , in pre-insolvency talks to prevent the engineer becoming Spain's largest ever bankruptcy, are considering involving bondholders in debt restructuring negotiations, two sources familiar with the situation said. It is unusual for bondholders to sit alongside creditors in negotiations connected to insolvency proceedings but in this case there is a common interest to get the company afloat given the massive size of potential losses, the sources said.

Spanish renewable energy and engineering group Abengoa faces a civil lawsuit after shareholders accused the indebted company of keeping them in the dark when it last week initiated insolvency proceedings, Reuters reported. The firm filed for preliminary protection against creditors after struggling for a year with high debts. It now has four months to reach an agreement with creditors to avoid a full-blown insolvency process and the biggest Spanish bankruptcy on record.

Abengoa SA, the Spanish renewable energy company that has filed for creditor protection, missed interest payments to noteholders in Mexico, Bloomberg News reported. Abengoa de Mexico SA investors were due 1.16 million pesos ($70,000) on Thursday, financial advisory Monex Casa de Bolsa SA said in two regulatory filings with BMV, the Latin American nation’s securities exchange. Monex represents holders of the notes, it said. Seville, Spain-based Abengoa filed for preliminary creditor protection with a court in its home city on Nov.

With Abengoa SA one step closer to becoming Spain’s biggest corporate bankruptcy, creditors are faced with the unpalatable choice of dumping their holdings or taking their chances on an eventual settlement with the renewable energy company, Bloomberg News reported. The predicament is playing out in the markets. Abengoa’s bonds were among the most-traded securities in Europe on Wednesday, with its 8.5 percent notes due in March plunging to as low as 12 cents on the euro from 63 cents, according to data compiled by Bloomberg.

Spain’s unemployment rate fell to its lowest level in four years, according to official figures released on Thursday, lifting Prime Minister Mariano Rajoy’s chances of winning a December general election in which joblessness is one of the critical issues. Spain’s unemployment rate fell in the third quarter to 21.2 percent, from 22.4 percent in the previous quarter, according to a report from the National Statistics Institute. That brought down the number of people out of work to about 4.85 million — the lowest since mid-2011.

Madrid has sought to draw a line under austerity, setting out a budget proposal that includes tax cuts, higher salaries for public workers and more spending on education, defence and diplomacy. In a sign of the country’s return to economic strength, ministers vowed to couple spending increases with further budget consolidation. Public debt is set to fall to 98.2 per cent of gross domestic product, the first decline since the start of the crisis.