After Madrid’s Commercial Court No. 1 admitted the company’s request for a pre-declaration of bankruptcy on April 5, Isolux has four months until August 5 to get the 400 million it needs to avoid to enter an arrangement with creditors.
The Board of Directors of Isolux Corsán unanimously agreed last March 31 to avail itself of article 5 bis of the Insolvency Law, in order to have time to finalize an injection of funds that allows the consolidation of the business activities reactivation.
The decision taken by the Board of Directors does not impact the maintenance of the group’s activity or the capacity to execute the operations, especially the projects initiated in recent months, and it protects it legally during the ongoing negotiations, the company explains in a statement.
In this context, and given the importance of the aforementioned negotiations with financial institutions in relation to the accounts for the 2016 financial year, the Board of Directors has agreed to postpone their formulation until their completion, with the confidence that they will culminate in a satisfactory way.
Isolux tries to avoid entering into an arrangement with creditors
Isolux Corsán management team has been negotiating this injection with its main funders and shareholders since the end of last year. In December, the first conversion of debt into capital was carried out as a result of the restructuring agreement approved in July and given green light by the judicial authority in October.
As a result of these transactions, the company’s shares were 94.67% owned by banks and bondholders, while the previous controlling shareholders diluted their stake to 5.43%.
It was in the middle of July when Isolux Corsán signed before the notary the Master Restructuring Agreement (MRA) that includes the financial debt restructuring, the share exchange and the injection of 200 million euro to facilitate the continuity of operations.
Following the signing of the Refinancing Agreement in July, Isolux Corsán simplified its organizational structure at the beginning of September, reducing the number of managers, and submitted a collective dismissal plan (ERE for its acronym in Spanish) to the unions that impacts 35.6% of the staff, that is, 535 out of 1,500 workers.
In compliance with the commitments acquired by Isolux in the refinancing agreement, the group continues to execute a divestiture plan for all the concession assets and has launched a search process for an investor for the holding company that groups the engineering and construction business (EPC).
It has also made a strong cost adjustment, reorganized the company and launched a business plan in order to fuel the projects pipeline.
Last November Isolux Corsán has put into commercial operation its first solar photovoltaic project in Japan owned by Grupo T-Solar. With a budget of some 90 million euro, the Gunma plant will generate 31.2 MWp and has been built within a period of 15 months.
Likewise, the Spanish-British company FieldFare Renewables, chaired by the Spaniard Vicente López-Ibor Mayor, has been granted the official award of 100 MW in Argentina´s first renewable energy auction called RenovAr 1 under the name FieldFare / Isolux.