Spain’s Abengoa asks to start insolvency proceedings for main unit

MADRID (Reuters) – Spanish engineering and energy group Abengoa SA has begun insolvency proceedings for its main unit, the company said on Thursday in a filing to the stock market supervisor.

The measure follows rejection by the Spanish government on Tuesday of a request for 249 million euros ($261.2 million) in state aid for the Abenewco 1 unit that would have given it more time to consider a takeover bid from U.S. private equity firm TerraMar Capital.

The Seville-based business had borrowed heavily for more than a decade to fund an aggressive expansion into clean energy from its traditional infrastructure projects.

In February 2021, Abengoa started voluntary bankruptcy proceedings after its creditors refused to extend a deadline for negotiating a restructuring agreement.

Abenewco 1, which holds the majority of its parent company’s assets and liabilities and employs most of the group’s 13,500 staff, was not part of those insolvency proceedings.

(Reporting by Jesús Aguado and Isla Binnie; Editing by Bill Berkrot)