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Abengoa loses 517 million in 2019 and calls for a new financial rescue plan

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Abengoa recorded a net loss of 517 million euros in 2019, compared to the 'red numbers' of 1,498 million euros in the previous year, mainly due to the impact of its debt on the net financial result for the year, said the group, which faced with this financial situation and the global crisis caused by Covid -19 it has been forced to review its expectations for the future, presenting an updated business plan.

As reported by the engineering and renewable energy group to the National Securities Market Commission (CNMV), the net result has worsened considerably compared to the previous quarter, mainly due to the effect of registering debt 'New Money 2', 'Reinstated Debt' and 'Old Money' at redemption value as a consequence of the event of default when registering negative net worth.

Thus, the company is going to ask the financial creditors for waivers to this situation of non-compliance in the coming days, "estimating that they will be approved."

The group, which already dodged in 2016 what would have been the largest bankruptcy in the history of Spain, after being beset by a debt of almost 9,000 million euros, In this situation, it has launched a new financial 'rescue' plan, the third in recent years, after those of 2017 and 2019.

The group's gross financial debt at the end of 2019 increased by 5% compared to the previous year, rising 5,948 million euros. This figure includes 1,165 million euros corresponding to debt of companies classified as held for sale, and 558 of project financing.

For their part, 4,225 million euros of gross corporate financial debt, 182 million euros are registered in the long term and 4,043 million euros in the short term. This debt value includes 2,987 million euros of 'Old Money' debt of mandatory conversion and 211 million euros of 'New Money II / Reinstated Debt' classified in the short term by the event of default.

Likewise, given the impact of the coronavirus pandemic and taking into account the evolution of the company during the 2019 financial year, the group chaired by Gonzalo Urquijo has reviewed the business forecasts included in the feasibility plan that it launched last year, presenting a new business plan.

NEGATIVE EQUITY OF 388 MILLION INDIVIDUAL SOCIETY

Specifically, once the business forecast review was carried out, the company commissioned an independent expert to determine the fair value of the stake that Abengoa holds in its investee Abengoa Abenewco 2 and, as a result of this assessment, at the end of the 2019 financial year. , the equity of the individual company Abengoa showed a negative amount of 388 million euros.

This negative equity is derived from the impairment expense recorded in the income statement for the year on its participation in that company.

250 MILLION WITH ICO GUARANTEE AND NEW GUARANTEES FOR 300 MILLION

In this way, in order to rebalance its assets and ensure compliance with this new plan, the company has implemented a series of measures that include the subscription of a new liquidity line for an amount of 250 million euros and a term of five years, with a guarantee from the ICO.

In addition, the group will request new lines of 'revolving' guarantees for an amount of 300 million euros to cover business needs until the end of 2021 and will proceed to close agreements with suppliers and other creditors with past due debt that allow the deconsolidation of that debt from the Abengoa Abenewco 1 perimeter, obtaining in exchange a preferential right to collection against the realization of certain assets.

It will also address the modification of certain conditions of the debt with the financial creditors of the 'New Money 2', 'Reinstated Debt', 'A3T Convertible Bond' and 'Old Money' debt, which may involve "debt write-downs and capitalizations".

The group highlighted that these measures are pending the modification of the financial instruments that they affect that the agreement with the financial creditors will require.

Regarding the impact of Covid-19, Abengoa indicates that many of the regions where the worst effects are expected, such as Latin America, the Middle East and Sub-Saharan Africa, are its main Abengoa markets.

In addition, the health crisis has affected financial markets, limiting the company's access to them to obtain financing.

Therefore, and taking into account the evolution of the company in 2019 and the delay of certain milestones of the old viability plan, such as the sale of certain assets and other monetizations, the group has chosen to review its financial projections and publish this new plan, with financial projections, which include figures for a term of 10 years until 2029. In this sense, the company continues to focus on 'EPC' projects for third parties.

SALES GROWED 15%

Abengoa's sales in 2019 reached 1,493 million euros, which represents an increase of 15% compared to 2018, and which is mainly attributed to higher execution in the Concessions segment due to the entry into operation of the A3T project in Mexico, as well as in the Engineering and Construction segment after the start of construction of the projects contracted during 2018 and early 2019.

The company contracted € 1,107 million, thanks to the award of new projects in the United Arab Emirates, Chile and Spain, among other countries, including the Taweelah project and the VilniusKlaipeda railway electrification project in Lithuania.

Taking these awards into account, The engineering and construction portfolio amounted, at December 31, 2019, to approximately 1,514 million euros.

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