UPDATE - Abengoa gets EUR-106m economic injection

Spanish company Abengoa SA (BME:ABG) recently signed a loan deal for EUR 106 million (USD 116m), for which it used as security shares it holds in Abengoa Yield plc (NASDAQ:ABY).

Engineering and renewables firm Abengoa is the yieldco’s sponsor and 47.1% owner. Other shares of Abengoa Yield have also been pledged as security for a EUR-165-million loan agreed by Abengoa in September.

The most recent EUR-106-million loan has a final maturity date of March 17, 2016. The economic injection has been agreed with financial stakeholders and now Abengoa working on an appropriated viability plan for its future. As it said on December 24, the firm aims to find a best-for-all solution under the counsel of Alvarez & Marsal and Lazard.

Abengoa initiated pre-insolvency proceedings in November after Gonvarri Steel Industries decided not to make a planned up to EUR-350-million investment in it. The company is protected under article 5 bis of the Spanish Insolvency Law for up to four months.

Earlier in December, Moody's Investors Service downgraded the ratings of Abengoa Yield, with the outlook remaining negative, due to the financial challenges at the yieldco's sponsor.

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