Abengoa announces a capital raise of €650 million

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Abengoa announces a capital raise of €650 million

Abengoa has announced that the board of directors has unanimously voted to submit to an Extraordinary Shareholders Meeting the approval of a capital increase with pre-emptive rights of €650 million (US$707 million).

Proceeds will be used to reduce corporate debt by €300 million (US$326 million), additionally to existing commitments, and to reinforce the balance sheet. Abengoa's largest shareholder, Inversion Corporativa has stated that it will participate in the capital raise with new money.

Additionally, Abengoa launched a new plan of divestitures for a total of €500 million (US$544 million), including the 400 million euros plan announced on July 31 and additional divestitures of bioenergy assets. The company expects to obtain all of the proceeds no later than Q1 2016.

The capital increase and the divestiture program are fully consistent with Abengoa's strategy explained on July 31:

  • Abengoa intends to expand on its asset and capex light Abengoa 3.0 strategy.
  • Abengoa will take the actions necessary to reduce its cost of financing and reaffirms its commitment to improve its rating.

These new significant actions are a direct response to the higher capex in 2015, given significantly lower financing expected in the Brazilian transmission lines.

The board of directors will meet today to review and consider the approval of an updated strategic plan that will include cash flow objective

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