Spanish power company Abengoa is working on a restructuring programme after achieving support from creditors for a “standstill” agreement to allow the firm more time to negotiate a deal with banks and bondholders and to avoid bankruptcy.

In late March, Abengoa received the backing of 75 per cent of creditors for a seven month “standstill” period to restructure. The energy company required the support of at least 60 per cent of creditors for the seven-month period to negotiate deals with banks and bondholders and bring in revenue. Restructuring efforts are ongoing as the firm seeks to avoid bankruptcy.

Abengoa sought initial creditor protection in November, after it emerged the firm had gross debts of €8.9bn ($9.4bn).The Spanish firm has been a major provider of renewable energy projects across Europe and the US in recent years and was part of the consortium, along with the local Masdar and France’s Total which developed the 100MW Shams 1 concentrated solar power (CSP) project in Abu Dhabi. In February, it was reported that the group would sell its 20 per cent share in the Shams 1 scheme.

Some in the banking sector have attributed several of its major financial difficulties to the substantial reduction or removal of renewable energy subsidies in Europe over the past three years.