Three banks back Abengoa rights issue, two more close
By Robert Venes
LONDON, Aug 25 (IFR) - Credit Agricole, HSBC and Santander have agreed to a standby underwrite for Spanish energy group Abengoa's proposed 650m capital increase, according to sources with knowledge of the matter.
Contracts have not yet been signed, however, and there remain questions as to whether that sum will be enough to plug Abengoa's capital requirements.
Bank of America Merrill Lynch and Citigroup are also talking to the company regarding underwriting but have yet to come to a final decision on whether to support the deal.
Two senior bankers involved with the discussions said that the success of a rights issue would depend on moves to improve Abengoa's capital position through asset sales, potentially including a reduction in the group's stake in Abengoa Yield, the US-listed entity that contains the group's operating assets.
Abengoa has already committed to completing 500m of assets sales by the first quarter of 2016.
Sources said that shareholder BlackRock will sub-underwrite 50m of the rights issue, with fellow shareholder and private equity energy specialist First Reserve also set to participate in the fundraising.
As before, main shareholder Inversion Corporativa is expected to be involved but it is not certain whether it will subscribe for its full entitlement, relating to its 57.53% stake (including 6.18% through Finarpisa). The foundation also owns 26% of Abengoa's B shares, according to Thomson Reuters data.
The banks named declined to comment, while BlackRock and First Reserve could not be reached for comment. Abengoa did not respond to requests for comment. Continuación...