* Company voluntarily requests start of bankruptcy process
* Creditors refuse to extend deadline on restructuring talks
* Regional government says it is unable to help (Updates with bankruptcy request)
MADRID, Feb 22 (Reuters) - Spanish engineering and renewables company Abengoa said on Monday it had decided to voluntarily request to start the bankruptcy process after its creditors refused to extend a deadline for negotiating a restructuring agreement.
A proposed restructuring to tackle Abengoa’s 6 billion euro ($7.30 billion) debt mountain has unravelled since the regional government of Andalusia withdrew an offer of 20 million euros in funding as part of the overall deal.
“The Board of Directors ... remains committed to seeking alternatives to avoid the non-viability of the subsidiaries that carry out the group’s activity and, thereby, preserve jobs and try to minimize the loss of value,” Abengoa said in a statement to the Spanish stock regulator.
The bankruptcy request was presented on Monday at a court in Seville. In its statement, the company said its board of directors had decided this was the most appropriate measure to safeguard the interests of the company and its creditors.
The company had said earlier on Monday that “in the absence of renewed consent to the deadline extension”, the restructuring agreement had been automatically terminated.
Since September Abengoa has repeatedly postponed the deadline to complete negotiations while it scrambled for alternatives to the Andalusia funding, but its creditors appear to have run out of patience.
A spokesman for the regional government said that Andalusia did not have adequate tools to inject direct aid for the company.
A spokesman from the Budget Ministry declined to comment on whether Abengoa could be entitled to receive help from a 10 billion euro fund that focuses on bailing out companies in strategic sectors.
In 2016 Abengoa narrowly avoided becoming Spain’s largest corporate bankruptcy after striking a deal to refinance 9 billion euros of debt, handing control of the company to an assortment of banks and investment funds.
The Seville-based business, which employs about 13,500 people, had borrowed heavily in the preceding decade to fund an aggressive expansion into clean energy from its traditional expertise in designing and building infrastructure projects.
By the end of 2019 - the most recent period for which complete figures are available - Abengoa’s total debt was 5.95 billion euros.
After the company cut annual losses to 549 million euros in 2019, from nearly 1.5 billion euros in 2018, the COVID-19 pandemic brought fresh troubles, stalling new projects and forcing the company back into talks with lenders.
Abengoa eventually secured a complex preliminary deal by which most of its assets would be transferred to a holding company, which would in turn receive 230 million euros in state-backed loans. But that has now collapsed.
Trading in Abengoa’s shares has been suspended for months.($1 = 0.8241 euros) (Reporting by Nathan Allen, Jesús Aguado and Joan Faus Editing by Ingrid Melander, David Goodman and Howard Goller)