Spain

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.

Spain emerged as the best performer of the eurozone’s big four economies last month as the single currency area largely shrugged off the impact of the Greek debt crisis, The Guardian reported. The latest health check conducted by the information services company Markit showed the pace of activity across the eurozone eased only slightly during the weeks when Greek banks were closed for business. But the survey found no signs that the eurozone was about to slide back into recession and, with Spain leading the way, was consistent with growth continuing at about 0.4% per quarter.

Bankia will look to fortify its balance sheet in 2016 through the issuance of subordinated debt instruments including Additional Tier 1, signalling another step forward for the bailed-out Spanish lender, Reuters reported. "There is no urgency and I don't foresee issuing capital this year, but we could issue an Additional Tier 1 and further Tier 2 next year," said Lennart de Jong, funding director at the bank. While Bankia has already tapped the Tier 2 market as part of its comprehensive overhaul, it has not yet sold an AT1 bond - the riskiest type of bank debt.