Bloomberg News

Abengoa Raises $395 Million From U.S. Private Equity Firm

October 04, 2011

(Adds explanation for discount in sixth paragraph.)

Oct. 4 (Bloomberg) -- Abengoa SA, Spain’s largest developer of solar-thermal plants, raised 300 million euros ($395 million) by selling new shares to First Reserve Corp., increasing capital and allying with the U.S. private equity firm.

The Seville-based developer agreed to sell 17.142 million Class B shares at 17.50 euros each, above the 15.84-euro closing price yesterday of its common Class A shares, according to a filing today. First Reserve will also receive warrants to buy 4.02 million more Class B shares for 1 euro cent each. Abengoa dropped as much as 7.7 percent in Madrid trading.

The pioneer of plants that focus sunlight with mirrors to power steam turbines reinforced its capital with the help of a private investor as banks across Europe and the U.S. have put more conditions on energy-project loans. Abengoa said its corporate net debt will drop to 2.4 times corporate Ebitda from 3 times before the deal.

The company now “won´t have any financial stress for the next couple of years,” Abengoa Chief Executive Officer Manuel Sanchez Ortega told analysts on a conference call. First Reserve must hold the shares for 30 months under the agreement.

The Class B stock, which doesn’t trade, will pay Greenwich, Connecticut-based First Reserve cash equal to the dividend that ordinary stockholders receive though will have only 1/100th the voting rights of the A shares.

Abengoa said it agreed to offer the additional stock for only 1 euro cent to compensate for it being illiquid and to reward the buyer for investing during unstable markets.

The company’s ordinary shares fell 1.09 euros to 14.75 euros at 4:14 p.m. local time.

‘Ideally Positioned’

First Reserve, which invests in energy projects around the world, selected Abengoa because it has “market-leading positions in industries and geographies that we know well,” First Reserve Chief Executive Officer William E. Macaulay said on the call. Abengoa “is ideally positioned to benefit from the global growth in energy infrastructure,” he said.

The Spanish company said its U.S. partner, which will have a board seat, will jointly explore future business opportunities such as financing Abengoa’s infrastructure projects, which range from aluminum recycling and water desalination to power- transmission lines.

--Editors: Randall Hackley, Alex Devine

To contact the reporter on this story: Todd White in Madrid at twhite2@bloomberg.net

To contact the editor responsible for this story: Todd White at twhite2@bloomberg.net


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