MADRID, Jan 25 (Reuters) - Renewable energy and engineering company Abengoa said late on Monday its board had agreed to press ahead with a debt restructuring and asset sales, as it races to avoid becoming Spain's biggest bankruptcy.
The Seville-based company said a viability plan presented to its board on Monday involved the sale of non-core assets, including its first generation biofuel business, as it focuses on its engineering and construction units.
"On the basis of that plan, the company will engage in negotiations with creditors over a debt restructuring and the necessary resources to continue its activity," Abengoa said in a statement.
Abengoa needs to strike a deal to restructure its debt within two months as well as secure more interim cash to run its operations.
The company aims to reduce its corporate debt to around 3 billion euros from 9 billion euros under the plan, a person familiar with the plan previously told Reuters, implying that creditors would have to accept a loss of about 70 percent on their investment and swap debt for shares.
The company did not confirm in its statement what level of so-called "haircuts" on debt it foresaw.
Abengoa said under the viability plan, presented by advisor Alvarez & Marsal, it envisaged revenue levels in the coming years would be about two third of those reached in 2014.
Shares in Abengoa closed up nearly 35 percent at 0.213 euros per share on Monday. (Reporting by Sarah White; Editing by Toni Reinhold)