Private equity firm First Reserve has made a strategic investment in renewable energy developer Abengoa.
The agreement involves the issuance, and subscription by First Reserve of 17,142,858 new Abengoa’s Class B shares, which will not be listed, at €17.5 per share. The Class B shares, which will have a nominal value of €0.01 per share, have the same economic rights as Abengoa’s A shares, which have a nominal value of €1 per share, and voting rights equivalent to their nominal value, meaning 1/100 of the rights of A shares.
First Reserve said it is committed to holding its position in Abengoa for two and a half years treating it as a strategic investment, strengthening Abengoa’s capital and helping it to develop its current strategic plan.
Abengoa will also issue 4,020,124 warrants for Class B shares with an exercise price of €0.01, which will grant First Reserve the right to acquire additional Abengoa shares and a right to receive an amount equivalent to dividends paid per share over a five year period.
Abengoa desctribed the deal as a “major strategic and financial endorsement” , representing “a show of confidence in the current and future value of the company”.
Manuel Sanchez Ortega, CEO of Abengoa, said, “We welcome First Reserve Corporation as one of Abengoa’s shareholders and we are grateful for the enormous enthusiasm and professionalism they have shown throughout this process. For Abengoa this investment, above anything else, is an explicit endorsement of the value of the strategy that we have been implementing for some time with the support of our current shareholders; a show of full confidence in the management and operational capacity of the company’s team of professionals; and clear recognition of Abengoa’s potential for creating value”.
In September First Reserve sold its entire $800m holding in Glencore convertible bonds in exchange for stock, driving the commodity company’s share price up following the news.
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