Da Bloomberg:
Abengoa Bonds Fall After Earnings Report Fuels Cash Burn Concern
2015-11-16 13:49:44.651 GMT
By Katie Linsell
(Bloomberg) -- Abengoa SA’s bonds dropped as analysts raised concerns that the Spanish renewable-energy company is burning through cash after it reported a nine-month loss on Friday.
Its 550 million euros ($590 million) of 8.875 percent bonds maturing in February 2018 fell for a fourth day, tumbling 5 cents on the euro to 54 cents, according to data compiled by Bloomberg. Its 500 million euros of 6 percent notes due in March 2021 fell 4 cents on the euro to 43 cents, the data show.
Abengoa said it lost 194 million euros in the period, compared with a profit a year earlier, and that it had negative corporate free cash flow of 597 million euros. The Seville-based company is seeking to raise funds from a capital increase and by selling assets, including all or part of its stake in Abengoa. Yield, which owns renewable energy and power assets in the Americas and Europe.
“Liquidity will run out shortly, unless the capital increase is successful or Abengoa manages to dispose of its stake in Abengoa Yield via a fire sale,” Felix Fischer, a credit analyst at independent research provider Lucror Analytics in Singapore, wrote in a note. “Access to capital is deteriorating rapidly and a default on its obligations is likely if the capital increase fails.”
Risk Perception
Hazel Stevenson, an external spokeswoman for Abengoa, declined to comment beyond Chief Executive Officer Santiago Seage’s statements last week.
“Our working capital, our corporate free cash flow and our liquidity have been impacted by Abengoa’s risk perception in the market,” Seage said on a conference call on Friday after the results. “We have announced a number of strategic actions that are already in place in order to restore confidence and reinforce a cash flow generation and liquidity.”
Abengoa said it had 346 million euros of cash immediately available at the end of the period, compared with 831 million euros in June. Some working capital facilities were put on hold or standby, the company said.
The most important numbers in the report were the corporate free cash flow burn and the company’s thin cash holdings, Jose Manuel Arroyas and Francisco Ruiz, Madrid-based analysts at Exane BNP Paribas wrote in a note to clients today. Abengoa isn’t able to access capital markets and needs a larger recapitalization plan, they wrote.
