UPDATE 1-Abengoa: Cash flow target cut decision was 'very recent'

jueves 6 de agosto de 2015 10:00 GYT

* Guidance cut reflects recent equity needs in Brazil - email

* Says working with banks, potential investors on rights issue

* Shares gain 9.5 percent to 1.2 euros on a rebound (Adds details, background and shares)

MADRID, Aug 6 (Reuters) - Indebted Spanish engineering and energy group Abengoa said on Thursday that a decision to slash its 2015 cash flow target was taken recently, triggered by an unexpected need to inject cash at projects in Brazil.

Abengoa, which builds and runs biofuel and thermal solar plants, cut its 2015 corporate cash flow target by about 50 percent on Friday and on Monday announced a surprise 650 million euro rights issue.

The moves sparked sharp falls in its share price, only two weeks after the company sold nearly 100 million euros worth of shares held as treasury stock at 2.8 euros per share. The stock was trading on Thursday at 1.2 euros each, up 9.5 percent on a rebound from recent declines.

"(The cash flow decision) was taken very recently (...) as a consequence of the deviation in the amount of debt of our projects in Brazil," Abengoa said in an emailed response to questions by Reuters on Thursday.

Management did not know it was about to slash guidance when it sold stock in mid-July, Abengoa said in a separate email to IFR, a Thomson Reuters service.

The Seville-based company is building electricity lines in Brazil, which it had planned to finance primarily through debt but now expects an equal split between debt and equity.   Continuación...