Creditor banks are lending financially strapped Spanish power giant Abengoa $123 million to temporarily avert what would be the country's largest bankruptcy, the company said on Dec. 24. The firm, which took on large debt to finance a global expansion in clean energy that includes a number of U.S. projects, has less than four months to renegotiate with lenders its outstanding debt of as much as $27.4 billion.
The loan will allow Abengoa "to find the best solution ... for employees, investors, customers, suppliers and communities where the company is present," said a firm statement.
The firm did not specify how the loan would be used, but according to Reuters, it will cover salaries and "current operations" while a group of about 200 creditors and firm financial advisors work out a restructuring by Jan. 18.
The cash injection follows the firm's removal on Dec. 14 as contractor of the Carty Generating Station in Oregon, which was because of cash woes. About 500 workers were turned away from the site, according to a report in East Oregonian, a local publication.
Owner Portland General Electric said Dec. 19 that it has taken over construction of the 440-megawatt, natural gas-fired power plant. Abengoa affiliate Abeinsa began construction at the site in early 2014.
The utility said "a new construction management team [would] update work plans at Carty before putting crews back to work."
Jim Piro, PGE president and CEO, said the project "is in an advanced state of construction, with all major components on site and installed or being installed."
The project, which was set to finish by mid-year 2016 to replace a nearby facility being retired, was originally set to cost $515 million. PGE did not disclose a current cost estimate.
PGE said it is in discussions with sureties Liberty Mutual Surety and Zurich North America, which provided a performance bond of $145.6 million and with other contractors to complete the work. Sargent & Lundy is design engineer.
Abengoa told ENR last month that it is reviewing its more than 250 projects in 50 countries "case by case.”
In Latin America, where Abeinsa is ranked the third-largest contractor by ENR, its parent is closing some operations and laid off 2,300 in Brazil earlier this month, although it will keep 400 employees there to continue some work.