Gonvarri to turn shareholder for Spanish Abengoa

9 November 2015 (Last Updated November 9th, 2015 18:30)

Spain-based Gonvarri Steel Services will be investing nearly €350m ($377m) to become a partial owner for Spanish green power giant Abengoa.

Spain-based Gonvarri Steel Services will be investing nearly €350m ($377m) to become a partial owner for Spanish green power giant Abengoa.

The firm is likely to acquire 28% stake in Abengoa in return for the potential investment.

Abengoa has been seeking partners to revive its dwindling capital base for months.

The acquisition will be done in two stages, in which Abengoa Class A shares will be purchased at €0.999 each and Class B shares at €0.767 under the first capital increase.

"The initial capital increase will see the firm investing around $268.4m excluding preferential rights for existing shareholders, reports Bloomberg."

The initial capital increase will see the firm investing around $268.4m excluding preferential rights for existing shareholders, reports Bloomberg.

Later on, Gonvarri will subscribe its proportional stake in a second 400 million-euro share sale.

Abengoa had stretched its financial limits over time, which had affected its share value. The firm had to secure backing from multiple bank creditors, for which it had to overhaul management and business model, increase scale of planned asset sales and restrict new investments.

The transaction with Gonvarri is, however, conditional on lenders maintaining their agreement to underwrite the rights issue since September.

In February, Abengoa had announced plans to invest about $2.5bn in a newly formed company along with EIG Global Energy Partners for acquiring new renewable projects, worth over $9.2bn.

The joint venture, Abengoa Projects Warehouse 1 (APW1), will have EIG as the majority owner holding a 55% stake, with Abengoa owning the remaining 45%.