Abengoa's parent used margin debt to fund 2013 capital hike
By Robert Smith
LONDON, Aug 7 (IFR) - Abengoa's parent company Inversion Corporativa raised a margin loan to participate in Abengoa's 2013 capital increase, according to documents seen by IFR.
Inversion Corporativa, a holding company whose owners include members of the families that founded Abengoa, has committed to participate in the troubled Spanish energy firm's upcoming 650m rights issue.
However, analysts have questioned the holding company's ability to participate in the capital raise.
"There is very limited visibility on the liquidity position of the family shareholding entity, Inversion Corporativa, which has agreed to take part in the equity raise," said BofA Merrill Lynch equity analysts in a note published on Tuesday.
Analysts and investors have long suspected that Inversion Corporativa raised margin debt to participate in Abengoa's last major capital raise of 517.5m in 2013.
These suspicions are confirmed by a copy of Inversion Corporativa's 2013 accounts seen by IFR.
The document says that Inversion Corporativa 1C signed a 65m syndicated loan on October 14 2013 in order to finance its 63m participation in the Abengoa capital raise.
The five-year loan was backed by a lien on Abengoa shares equivalent to double its value, with Inversion Corporative pledging more than 10m of Abengoa's Class A shares and more than 56m of its Class B shares.
When asked about the margin loan and Inversion Corporativa's ability to take part in the upcoming capital raise, a spokesperson for Abengoa said: "IC has said that they are fully supportive of the capital increase and are planning to participate, the specific amount is still to be determined." (Reporting by Robert Smith, editing by Owen Wild.)
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