US judge grants bankruptcy protection to Spain’s Abengoa

A judge at the US Bankruptcy Court has approved Abengoa SA’s (BME:ABG) filing for protection under Chapter 15, thus recognising the latter’s bankruptcy case at home in Spain, the Wall Street Journal reports.

Last month, some of the Spanish renewables and engineering group’s US subsidiaries initiated cases under Chapter 15, while others filed a voluntary petition for Chapter 11 protection. This followed the parent’s commencement of insolvency proceedings at home in late November 2015.

Contrary to what some of Abengoa’s US creditors insist on, the Spanish restructuring proceedings do not have to be identical to those in the US in order to be recognised by the court, the judge says.

About 75.04% of Abengoa’s creditors agreed last month to a seven-month standstill contract, giving the company more time to work on its debt restructuring. Earlier in 2016, Abengoa presented a viability plan under which it would seek to reduce costs and offload non-core assets in an attempt to emerge as a smaller business with less debt.

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