The Spanish green energy company Abengoa has filed for Chapter 15 bankruptcy protection in the U.S. after getting billions of dollars from the Obama administration to build solar power and biofuels plants.
Abengoa, which has gotten $2.7 billion in federal subsidies, filed for U.S. bankruptcy protection after already filing for bankruptcy in Spain. In U.S. bankruptcy court, Abengoa can get more favorable terms, such as “the so-called automatic stay that halts lawsuits and prevents creditors from seizing assets,” according to The Wall Street Journal.
Abengoa took on nearly $17 billion in debt, according to court filings, after it aggressively expanded in hopes the green energy market would grow much faster than it did. The company has floated a restructuring plan to shed assets until it’s only about $5.5 billion in the hole.
“It is my belief that the relief requested in the petition and related motions is necessary…to protect the U.S. assets of the petitioning group members and to prevent creditors from taking actions in the U.S. under U.S. law in a way that could frustrate the group’s efforts to agree a restructuring,” Borja Fernández de Trocóniz, Abengoa’s lawyer, wrote in court documents obtained by WSJ.
Abengoa, which Bloomberg has referred to as Spain’s “Teetering Sun King,” got $2.7 billion in DOE loan guarantees since 2010 for two solar energy projects and a massive cellulosic biofuels plant that has yet to announce production levels or sell any product it produces. These projects were financed with subsidized loans from the Treasury Department’s Federal Financing Bank (FFB).
The FFB was Abengoa’s largest single creditor, with a total exposure of 2.2 billion euros, or $2.34 billion, at the end of September 2015, according to the Spanish news outlet Expansion.
The pro-labor union group Good Jobs First reported last year Abengoa has “received $605 million in grants and allocated tax credits; $464 million came from Section 1603 and most of the rest from Energy Department research grants.” That’s on top of the $2.7 billion the company got in DOE loans.
Abengoa’s bankruptcy announcement comes amid reports that SunEdison, the world’s largest green energy company, could be facing insolvency.
A SEC filing from TerraForm Global, a unit of SunEdison, claims “due to SunEdison’s liquidity difficulties, there is a substantial risk that SunEdison will soon seek bankruptcy protection.” The company’s shares fell 95 percent in the past 12 months, and SunEdison’s market value fell from $10 billion in July 2015 to around $400 million today.
Good Jobs First reported SunEdison and its subsidiaries got nearly $650 million in subsidies and tax credits from the federal government since 2000. It was the 13th most heavily-subsidized company in America.
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