The Spanish conglomerate of Abengoa SA, the Abengoa Bioenergy US Holdings LLC, has received a temporary financial relief. The money will be used by the company to aid it in its reorganization.
It was just after a week when Abengoa Bioenergy filed for bankruptcy. It became a guarantor from its Spanish parent debt which reached more than $60 billion on top of a $20 billion previous debt. The company is now in the middle of its restructuring process.
According to The Wall Street Journal, the ethanol plants that Abengoa operates include a Hugoton Kansas facility that opened in 2014 with a $132.4 million loan guarantee which also includes a $97 million grant coming from the US Department of Energy.
Also in December of the same year, the company arranged for $15 million in financing from Mazuma Capital of South Jordan, Utah to be able to lease equipment's to restart the plant's operations. The company resumed operations in September 2014 after closing it for about three years, but it closed again in November of the same year which caused 45 employees to lose their jobs, as reported by Wichita Eagle.
Judge Kathy Surratt-States, a US bankruptcy judge, headed the approval of the temporary DIP loan granted to the company. However, the grain supplier wherein Abengoa has borrowed money from objected because they are afraid that the money will end up in its parent company in Spain. The ruling has paved the way for Abengoa to borrow $7 million and will have the opportunity to ask the court additional monetary assistance if neede, according to Reuters.
Gavilon Grain LLC, The Anderson Inc., the Farmer's Cooperative Association, and Central Valley Ag were the one who opposed the said ruling. These companies said they have court documents which can prove that the US-based company was transferring its money and loan credits to Spain.
However attorney Richard Chesley who represents Abengoa assured these companies that it is not going to happen. He added that they are already closing the Spanish bank accounts and the cash flow is very controlled. Abengoa has appointed Antonio Fornieles as the new chairman to try and facilitate the company's debt restructuring.
