Gonvarri Steel to invest $377m in renewable energy company Abengoa
10 November 2015
Spanish firm Gonvarri Steel Services is reportedly planning to invest close to €350m ($377m) to become a shareholder in renewable energy company Abengoa.
With the proposed investment, Gonvarri will acquire 28% stake in Abengoa, which was looking for capital increases for the past few months.
Gonvarri will become a shareholder in Abengoa in two stages. It will acquire Abengoa Class A shares at €0.999 each and Class B shares at €0.767.
The company will initially invest $268.4m through a capital increase without including preferential rights for current shareholders and will then subscribe its proportional stake in a second share sale worth €400m, Bloomberg reported.
Reuters reported that Abengoa has been under probe over its debt levels for several months.
Abengoa said that the transaction with Gonvarri was conditional on lenders maintaining their agreement to underwrite the rights issue since September.
Founded in 1941, Abengoa carries out traditional engineering activities in the energy and water sectors. It focuses on generating electricity from renewable resources, converting biomass into biofuels and producing drinking water from sea water.
Abengoa and EIG Global Energy Partners recently announced plans to invest about $2.5bn in a newly formed company to acquire new clean energy projects, worth over $9.2bn.
Both the companies plan to set up Abengoa Projects Warehouse 1 (APW1) in the next four to six weeks.
EIG will hold 55% stake in the new venture, while Abengoa will own the remaining 45% stake.