Oil report

UPDATE 1-Spain's Abengoa begins insolvency proceedings for part of its business

(Adds details, background)

MADRID, Aug 18 (Reuters) - Troubled Spanish renewables firm Abengoa has begun preliminary insolvency proceedings for part of its business in an ongoing restructuring process, the company said in a regulatory filing on Tuesday.

Abengoa said the measure would give it more time to finalise negotiations with creditors and protect the interests of its shareholders.

The proceedings relate to Abengoa SA, an entity that was already earmarked to be dissolved as part of the restructuring.

Already struggling with a heavy debt load, Abengoa was hit hard by the coronavirus pandemic, which put a stop to several projects and disrupted its supply chain, weighing on revenues.

Following prolonged negotiations, the company secured a complex deal with its creditors in early August.

Under that agreement, most of the group’s assets will be transferred to a holding named AbenewCo 1, which will receive state-guaranteed financing of up to 230 million euros ($274.62 million).

The regional government of Andalusia, where Abengoa is based, will also contribute 20 million euros.

In 2016, Abengoa avoided becoming Spain’s largest-ever corporate bankruptcy after striking a deal to refinance 9 billion euros of debt, which handed creditors control of the company.

$1 = 0.8375 euros Reporting by Nathan Allen, Editing by Andrei Khalip