Global Green Energy Zombie Abengoa, Caught Cooking its Books in 2015 & Bailed Out Twice, Finally Runs Out of Bailouts, Files for Bankruptcy, 2nd Largest in Spanish History

Biggest beneficiaries of the now scuttled rescue plan would have been private equity firm KKR and Banco Santander.

By Nick Corbishley for WOLF STREET:

Abengoa, the global renewables energy giant that was caught cooking its books in 2015, collapsed a year later but narrowly avoided insolvency by restructuring €9 billion of its debt and receiving a government bailout, only to hit the rocks again in 2018 and restructure even more debt and receive yet another bailout, has just hit the rocks again and filed for insolvency after the regional government of Andalusia withdrew an offer of a measly €20 million in funding as part of Abengoa’s latest rescue deal. Abengoa’s lenders finally lost patience and turned off the money taps.

Bloomberg described it as the biggest insolvency filing in Spanish history, before retracting the claim hours later. According to El País, it is the second largest, after Martinsa Fadesa’s collapse in 2008 under a €7.2 billion debt load.

As of March 31 2020, Abengoa purportedly had €5.9 billion of debt still sitting on its books — more than two thirds of it short term. That’s according to its financial statement for 2019, which it didn’t release until February 21, 2021 — just three days ago and over a year after deadline — and which still hasn’t been signed off by its auditor, PwC.

Of course, it’s perfectly possible that Abengoa’s debt load is larger than it claims. The company has form when it comes to hiding monstrous amounts of debt from investors and regulators for inordinate lengths of time.

What’s more, its 2019 financial statement did not include the all-essential auditor’s report, for the apparent reason that the board didn’t even bother sending the document to its auditor, PwC, before publishing it. This is not just highly improper, it contravenes Spain’s market regulations. It also makes the document virtually worthless. And that was enough to finally spur market regulator CNMV into action, which has launched an investigation into Abengoa’s board of directors.

Abengoa has been back on the ropes for some time but in August it reached a preliminary deal with its creditors to restructure its debt and obtain additional liquidity. History being repeated, it seemed. But the deal was scuppered when a large bloc of disgruntled retail shareholders decided that they’d finally had enough of being taken for a ride by the company’s management.

Abengoa almost totally wiped out its shareholders in its 2016 restructuring. Since then, the stock fell further toward zero before finally being suspended months ago. On the last day of trading, the “B” shares were worth just half a cent.

In November, the minority shareholders voted out Abengoa’s then-president Gonzalo Urquijo Fernández de Araoz, whose sole function had been to represent the interests of Abengoa’s biggest creditors, its lenders. The person they elected in his place, Juan López-Bravo, ended up reneging on his pledges and threw his support behind Abengoa’s original rescue plan.

That plan would have seen most of its assets transferred to a holding company, which would in turn receive €230 million in state-backed bailout loans. Creditors, in particular the group’s suppliers, would have taken a big haircut while shareholders no longer matter.

The biggest beneficiaries of the plan would have been Abengoa’s two largest creditors, Banco Santander, and the U.S. private equity fund KKR, which have the greatest exposure to Abengoa’s debt. If the deal had gone ahead, they would have ended up holding around 60% of the stock of a newly restructured company.

But the deal is now off. The banks have cut off financing. The shareholders had planned to vote out Gonzalo Urquijo Fernández de Araoz at the next shareholder meeting and replace him with Clemente Fernández, a veteran boardroom executive with extensive experience of salvaging companies in distress. But the banks have preempted it by cutting off the money taps and triggering insolvency.

The board of directors is now seeking alternatives to ensure the subsidiaries that carry out the group’s activities remain viable, the company said in the filing. This has been the plan all along: to liquidate the parent company, Abengoa SA, while keeping many of the subsidiaries that hold the most valuable operational assets alive.

The battle for control of the company continues to rage. The blame game, between the banks and different branches of the government, has begun. And the market regulator has finally been forced to pay attention to what’s been happening behind Abengoa’s boardroom doors.

Plus, by forcing the company into insolvency, the banks have effectively admitted that Abengoa is insolvent, which will make it a lot harder for the government to justify giving the company yet another bailout. But this is Abengoa we’re talking about, one of the world’s most resilient zombie companies that has always managed to get another bailout and keep on going. By Nick Corbishley, for WOLF STREET.

The UK’s crucial services exports, manufacturing exports and imports, the arts & entertainment industry, fishing industry – it’s a mess. Read… The Growing Pains of Brexit, 50 Days In

Enjoy reading WOLF STREET and want to support it? You can donate. I appreciate it immensely. Click on the beer and iced-tea mug to find out how:

Would you like to be notified via email when WOLF STREET publishes a new article? Sign up here.

  43 comments for “Global Green Energy Zombie Abengoa, Caught Cooking its Books in 2015 & Bailed Out Twice, Finally Runs Out of Bailouts, Files for Bankruptcy, 2nd Largest in Spanish History

  1. roddy6667 says:

    They should rename the company Abengoa Blockchain and sell more stock. All the trendoids would empty their retirement accounts and refinance their houses to buy in.

    • Joan of Arc says:

      Yes, roddy6667 , I agree. The Government needs to have a heart and bail them out a 3rd time based on the principle that the third time is a charm. It’s just a matter of the ECB printing some new money…a simple keystroke.

    • 2banana says:

      Better yet – get a Reddit investment burn the shorts group going!

    • K says:

      Yes. LOL. I do wonder which will collapse first, the US “tulip” markets (a.k.a. the digital coins) or the US dollar. Given the (not-government-owned) “Federal” Reserve’s continuing, extreme, money creation with gusto, with almost a quarter of all dollars printed reportedly printed last year, it will be a tight race: hyperinflation vs. digital coin collapses. See “Almost a fifth of ALL US dollars were created this year ” in City am dot com.

      At least we are doing better with US investments than companies in China, by a significant percentage: out of twenty mainland Chinese companies chosen to be randomly audited from all of those that sought to go public in China, sixteen withdraw their applications upon learning that they would have their books examined. LOL.

      Even US companies’ Enron-style accounting is probably not that wide spread, i.e., 80% bad, if the companies were truly randomly chosen. I am sure that there are even worse apples run by immediate relatives of Xi, etc.

      Thus, if you want to “invest” in probably worthless glitter, you may actually be better off investing in randomly chosen digital coins than in mainland-Chinese companies. LOL. The digital coin’s rise in price is usually arbitrary, so it does not matter much which one as long as it is one that is heavily promoted and publicized: that is how they get their “value” like tulips, with chains of morons buying them at higher and higher prices.

      On the other hand, just donating it to a charity will probably result in happier endings all around in the very long run. At least, there will be less crying when you lose your shirt.

  2. Alberta says:

    Green paris accord

    slushy prototype projects

    mainly benefit banks

    no surprise here,

    But not this time?

    • Thomas Roberts says:

      Clearly the issue here is that the Spanish government wasn’t giving Abengoa enough subsidies, if it was, Abengoa wouldn’t require bailouts. And bailouts just make Spain and Abengoa look bad.

      In the future, Spain will have to be more progressiive and give Abengoa all the subsidies they need for the Spanish green sector to thrive. Other better countries give those subsides and are better for it.

      Bailouts = backwards, uuggglllyyy traasshh.
      Subsidies = forward looking and clean.

      The Spanish government better start planning some expensive projects :) or they will have to bailout :( Abengoa again.

  3. 2banana says:

    What could go wrong…..????

    “What’s more, its 2019 financial statement did not include the all-essential auditor’s report, for the apparent reason that the board didn’t even bother sending the document to its auditor…”

  4. KGC says:

    Spain can’t let Banco Santander fail, and Banco Santander can’t absorb another $2+ billion in bad loans.

  5. Anthony A. says:

    With 14,000+ employees and projects all over the globe, they will likely comeback and blame the poor performance on Covid19. Then everyone will save face and bailouts will be forthcoming.

    At least that’s what would happen if it was a U.S. company.

  6. Bombatz says:

    Is that the company that was shining electric lights on solar panels at night to collect the subsidies?

  7. robert says:

    Green energy = scandal. It’s when government money (i.e. your money) chases rainbows. Pretty well all of them are either subsidized or collapse in ruin, and nobody knows where the money goes.
    Viability is a function of economics and has to progress by increment and increase of efficiency, not to have a ton of money thrown at it because it’s the latest thing trending.

    • Cashboy says:

      You clearly have not read Bill Gates’s new climate change book.
      According to Bill, money is no object as long as it is not his money.

      • Mira says:

        Bill Gates hasn’t got any money of his owe .. he came to Australia with a begging bowl in hand.
        PM Julia Gillard was an easy touch.

        • Mira says:

          Christine Lagarde, Julia Gillard’s best loved & new found friend also showed up.

    • MarMar says:

      Yes, as we all know, fossil fuel companies have never had bailouts, scandals, or lavish subsidies. /s

      • robert says:

        Fortunately most of them representing the bulk of production and downstream products are profitable enough to pay substantial royalties and taxes. Those unfamiliar with the business often describe depletion allowances as subsidies.

        • NBay says:

          I’m just a stupid lib snowflake, but I do understand one of the words in your more advanced economic thinking….

          “depletion”… means goes away and won’t come back…

          ……well, for another 100 million years or so, but I’m sure you have a plan for that. Or a synaptic black hole.

        • char says:

          Welcome to wolfstreet Robert

          ps. Don’t read any of the shale oil articles on wolfstreet.

  8. Brad Tifman says:

    More often then not, when tracing who is ultimately looted when such scams unwind, one will find millions of unsuspecting people. Millions of unsuspecting Spanish, American, etc. pensioners just took a huge hit.

    • Wisdom Seeker says:

      It’s more subtle than that. The “huge hit” was there all along, it’s only just now being recognized.

      J.K. Galbraith famously described the hidden-but-present embedded losses as “bezzle” – like when someone’s funds have been embezzled, but they don’t know it yet, so they think they’re still wealthy.

      There is an utterly immense amount of bezzle in the global economy right now. Printing up fiat credit to postpone the recognition is absolutely the wrong approach, but then again no one has the stomach to recognize the losses en masse.

      • Wisdom Seeker says:

        Followup thought: Probably the biggest current “bezzle” in the world economy right now is the COVID debt&rent deferral issue. Borrowers and renters kept spending while they could, but payments didn’t go to the landlords & lenders, and at some point that has to be caught up in the accounting. Everyone pretended everything was fine while they could, but who will finally foot that bill?

  9. Ron says:

    The fun is just beginning check out American banks and clo obligations repeat of 2008 not going to be pretty everything is in bubble territory so Wall Street just keeps playing the rotation game disgusting the way they steal our money 401k funds it all can you spell ponzu

  10. Cashboy says:

    I don’t see a problem.
    This company doesn’t need to go bankrupt.
    It just needs to issue bonds and the ECB to buy them.
    The ECB has been struggling to find bonds to buy so it would be a win win all round wouldn’t it?
    You have to laugh at what is going on in this world.

    • Yancey Ward says:

      There will be lots of people who will read this comment and say to themselves, “That sounds like a reasonable idea.”

      • Javert Chip says:

        Yancy Ward


        Not only are lambs easily lead to the slaughter, but a significant portion of them actually beg to be sent (green new seal, et al)

    • Mira says:

      How many time can they throw themselves over the cliffside ??
      It’s like giving a drunk money to go buy food ..

  11. Wisdom Seeker says:

    Be really interested to see Wolf’s take on the most unusual market action this week.

    Very rare for both stocks and government bonds to tank simultaneously. Even stranger that even though corporate bonds and stocks have both dropped, the junk bond ETFs have barely moved!

  12. Hotairmail says:

    Who pays Nick? Stockholders, bond holders, tax payers, other Eurozone governments/taxpayers? Who would you like it to be? And who has run off with the money? If you open your eyes, you can see mass corruption endemic across many countries in the EU. From the embedded mafia in Italy to the statism of France and Germany or the straightforward financial sector capture in Malta, Ireland and Cyprus. Would you grant a cfd provider based in Malta equivalence? No I wouldn’t either.

    • c_heale says:

      In the UK too…

    • Wolf Richter says:


      Stock holders already got totally wiped out. They paid.

      Different generations of bondholders already got haircuts in the prior restructurings. They paid.

      Spanish taxpayers already helped bail out the company. They paid.

      Abengoa entities filed for bankruptcy over these years in other countries, including in the US, and creditors paid in those countries.

      Here is our series on this saga:

      • Wisdom Seeker says:

        Perhaps the question is whether there would have been less pain all around, if the company hadn’t been bailed out in the first place.

        How much Eurocredit was created and wasted to keep a bad idea alive? Surely better things could have been accomplished with all the labor and credit expended in the failed effort to keep Abengoa going?

        There’s a deep, hidden cost to all the credit-printing waste. It’s the invisible cost of the lost opportunities, the better paths not taken. It makes nearly everyone poorer except those skimming the fees and bonuses from the zombies.

        Hotairmail’s right that some people made off with a lot in salaries, bonuses and investment banking fees while the zombie was kept alive. Those people have names and can be shamed. They probably fed contributions to relevant policy and decisionmakers as well…

  13. DR DOOM says:

    Thank god that somebody finally read Zombie killing 101. A head decaptization is the only sure way to put down a Zombie.

  14. Javert Chip says:


    Why the question about who pays Nick, and why the accusatory tone:

    “…And who has run off with the money? If you open your eyes, you can see mass corruption endemic across many countries in the EU…”.

    If you think Nick denied any of the above, you have a pretty severe reading comprehension problem. I appreciate Nick’s pieces – they’re generally filled with facts & figures as well as a pretty good explanation of the backstory on yet another all too obvious corporate fiasco.

    You’re demanding unreasonably fine-grain details from Nick; go beat on a public prosecutor for answers to all your legal questions (“Who ran off with the money?”). Nick’s done a pretty good reporting job describing this piece of garbage.

  15. Dale says:

    Whenever I read a terrible tale of corruption, incompetence, shafting the retail shareholders and bailouts that accomplish nothing except to reward the greedy, corrupt, and incompetent, I think to myself, “private equity at work here somewhere”. Very rarely disappointed.

    Thanks Nick for the insightful writeup.


  16. BuySome says:

    Dear Abengoin-down-the-drain-a,
    I would like to attend your school in green cooking. Do you accept transfer of semester credits earned on-line from I.O. University? Will payment in silver be acceptable? I would love to specialize in bacon based recipes. Signed Porky del Piggy.

  17. keppered says:

    Why can’t I admit that I cook them books?
    I mean it don’t hurt nobody.
    Ain’t no one gonna catch me,
    Just keep it quiet,
    Ain’t nobody the wise person

    • Mira says:

      It’s all very well to be an expert book cooker & we can conquer the world.
      But can you run a business successfully.
      And the answer is obviously NO.

      Abbott & Costello – Who’s On First.

  18. Jack 07 says:

    Just shaking my head as I read Nick’s report. :)

    Would it be too much to ask if

    Criminal charges be brought against the directors of this entity?

    Criminal charges against the stupid government officials who saw it feasible to burden the taxpayers NOT ONCE ! But TWICE!! :)

    I mean surly there have to be some sort of
    repercussion ?!

    Or I am living on a different planet :) ?!!

Comments are closed.