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Researched by Industrial Info Resources (Sugar Land, Texas)--Abengoa S.A. (NASDAQ:ABGB) (Seville, Spain) has launched the sale of its biofuel technology subsidiary, Abengoa Bioenergy S.A., for $1 billion in hopes of raising 90 million euros by the end of January and 500 million euros by March 28 to avoid going bust.
The company is aiming to reduce its debt to around 3 billion euros ($3.25 billion) from 9 billion euros currently, saying that banks and bondholders would have to accept a loss of about 70% on their debt and swap the remainder for equity.
The company plans to focus on engineering and construction to remain afloat and sell non-core units that include biomass, electrical transmission and wind sectors. The firm will return to its roots from over 70 years ago and concentrate on engineering and construction through its Abeinsa companies.
In December 2015, the U.S.-based biofuels unit Abengoa Bioenergy Corporation announced the closing of the Chesterfield, Missouri headquarters, affecting 263 employees at the office. In all, Abengoa has 462 employees in its U.S. business, representing about 10% of its global staff.
Soon after, the company began layoffs and shuttered operations at the Hugoton, Kansas cellulosic ethanol plant. In late September 2014, the company had just completed construction of the estimated $350 million facility, which included a 25 million gallon-per-year cellulosic fuel ethanol plant and a 20-megawatt (MW) biomass cogeneration unit. In all, Abengoa plants located in the Midwest had the capacity of producing an estimated 375 million gallons of ethanol annually.
Not long after, in June of last year, the company shuttered the Portales, New Mexico ethanol plant, which produced 30 million gallons per year of fuel ethanol. The fate of the remaining facilities in Mount Vernon, Indiana and York, Nebraska are still in operation and are expected to be sold during the liquidation, if a buyer is found.
Jay Brunson, vice president of Alternative Fuels at Industrial Info said: "Those plants represent a good amount of domestic fuel ethanol production. Ethanol margin are tight currently and ethanol futures rallied a bit last week. However, with large ethanol inventories the overall markets remains weak, and finding a buyer for those plants will be a real challenge. Their fuel pellet division, AEC Pellet 1 USA, that had plans to construct a new 530,000 tons per year pellet mill in Fairfield County, South Carolina, never materialized."
The Abengoa plants are estimated to represent $850 to $900 million in assets, but selling the plants at cost will be a hard sale. Someone could come in and buy the plants at bargain prices during a fire sale.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
The company is aiming to reduce its debt to around 3 billion euros ($3.25 billion) from 9 billion euros currently, saying that banks and bondholders would have to accept a loss of about 70% on their debt and swap the remainder for equity.
The company plans to focus on engineering and construction to remain afloat and sell non-core units that include biomass, electrical transmission and wind sectors. The firm will return to its roots from over 70 years ago and concentrate on engineering and construction through its Abeinsa companies.
In December 2015, the U.S.-based biofuels unit Abengoa Bioenergy Corporation announced the closing of the Chesterfield, Missouri headquarters, affecting 263 employees at the office. In all, Abengoa has 462 employees in its U.S. business, representing about 10% of its global staff.
Soon after, the company began layoffs and shuttered operations at the Hugoton, Kansas cellulosic ethanol plant. In late September 2014, the company had just completed construction of the estimated $350 million facility, which included a 25 million gallon-per-year cellulosic fuel ethanol plant and a 20-megawatt (MW) biomass cogeneration unit. In all, Abengoa plants located in the Midwest had the capacity of producing an estimated 375 million gallons of ethanol annually.
Not long after, in June of last year, the company shuttered the Portales, New Mexico ethanol plant, which produced 30 million gallons per year of fuel ethanol. The fate of the remaining facilities in Mount Vernon, Indiana and York, Nebraska are still in operation and are expected to be sold during the liquidation, if a buyer is found.
Jay Brunson, vice president of Alternative Fuels at Industrial Info said: "Those plants represent a good amount of domestic fuel ethanol production. Ethanol margin are tight currently and ethanol futures rallied a bit last week. However, with large ethanol inventories the overall markets remains weak, and finding a buyer for those plants will be a real challenge. Their fuel pellet division, AEC Pellet 1 USA, that had plans to construct a new 530,000 tons per year pellet mill in Fairfield County, South Carolina, never materialized."
The Abengoa plants are estimated to represent $850 to $900 million in assets, but selling the plants at cost will be a hard sale. Someone could come in and buy the plants at bargain prices during a fire sale.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
