MADRID, Aug 3 (Reuters) - Indebted Spanish renewable energy company Abengoa announced a surprise 650 million-euro ($713 million) share issue on Monday, having ruled out such a move on Friday when it announced it would sell more assets and cut its profit forecast.
The shares were down 16 percent at 1.913 euros by 1116 GMT, having tumbled more than 45 percent in the last fortnight on concerns for the company’s operating cash flow - which was a negative 201 million euros in the first half of the year but is now due to be positive at around 500 million euros for the full year.
The company, which builds and runs biofuel and thermal solar power plants, successfully listed the operator of some American renewable plants as Abengoa Yield last year .
However, the performance of the parent firm’s shares and bonds have had a rocky time in recent weeks, forcing the company to commit to additional divestments and last month announced further guarantees on its convertible bonds.
On Monday Abengoa said it would use about 300 million euros of the capital increase to pay down corporate debt, which stood at a net 2.6 billion euros at the end of June, when the company’s total consolidated debt stood at 9.8 billion euros gross, and 6.554 billion euros net.
It gave no details on the timing or conditions of the capital increase, which is equivalent to 34 percent of the capitalisation of the company’s listed class B shares, which are a constituent of Spain’s leading IBEX-35 index.
Abengoa said its biggest shareholder, the Benjumea family, which owns about 57 percent of Abengoa, would partipate in the increase through investment vehicle Inversion Corporativa IC.
“The capital raising will generate certain volatility in the short term until it takes place,” said Bankinter in a note to clients, saying it expected the operation to be carried out in September.
But some analysts are concerned the company is overcommitting to cash-intensive projects in countries like Brazil and Mexico rather than focusing on cutting debt.
On Monday Abengoa also said it would sell off 500 million euros worth of assets - up from the 400 million euros value it put on planned disposals announced on Friday - and said some would be from its biofuels division. ($1 = 0.9116 euros) (Additional reporting by Jose Elias Rodriguez; Editing by Greg Mahlich)