Spanish court gives Abengoa seven months to restructure debt

A Spanish court said Wednesday it had agreed to give Spanish renewable energy firm Abengoa an additional seven months to strike a debt restructuring deal with creditors and avoid bankruptcy.

The court in the southern city of Seville said it had agreed with a "standstill" deal Abengoa reached on March 28 with three-quarters of its creditors for the seven-month grace period.

The deal gives the company until October 28 to convince banks and bondholders that have not already signed off on a restructuring agreement found with a group of creditors to do so.

Abengoa ended 2015 with a debt of 9.4 billion euros ($10.5 billion), which it hopes to slim to 4.9 billion.

It announced in November it was filing for preliminary protection from creditors in Spain and had been given a March 28 deadline to strike a deal with at least 60 percent of its debt-holders.

In February, Abengoa's affiliates in the United States filed for bankruptcy.

The company, which employed 28,700 people worldwide in 2015, wants to refocus on core activities. It has already signalled its intentions to sell off its biofuels assets and other holdings.

A family-owned company founded 75 years ago, Abengoa rose from being a local electrical firm, fixing installations damaged in Spain's 1936-39 civil war, to a major player in solar energy and other renewables.

But risky bets on biofuels, Spain's cuts to renewable energy subsidies during an economic downturn and the Benjumea family's refusal to raise capital for fear of losing control of the company pushed it to the edge of bankruptcy.

The company's head, Felipe Benjumea, stepped down last September. He is under investigation for serious mismanagement and under fire for taking a compensation package of 11 million euros.