Resurrected Abengoa & Construction Giant OHL Flirt with Collapse

After years of dodgy accounting and mismanagement.

The past five days have been brutal for two once-emblematic Spanish companies, Abengoa and OHL. Four years ago, the two firms were among the 35 largest listed companies in Spain. OHL was a global construction colossus that was involved in one of the world’s most ambitious and infrastructure projects, the high-speed railway line between the Saudi Arabian cities of Mecca and Medina.

Abengoa was a world leader in the renewable energy sector, with operations across the globe. But it grew so fast and took on so much debt that it needed to hide many of its liabilities. Like Enron, it could not keep the game going on for long, and in 2015 it collapsed under the weight of its own debt. It was then given a new lease of life in the biggest court-supervised corporate restructuring in Spanish history. Abengoa’s US unit went through bankruptcy in the US. Its unit in Mexico went through insolvency proceedings in Mexico. But its new debt load keeps growing while the losses keep piling up.

In the last five days of trading, Abengoa’s most liquid stock, its “B” shares, which were already essentially worthless, slumped another 39%, to 1/4 of a cent.

The main trigger for the latest collapse was the company’s disclosure that it had racked up €213 million of losses over the first nine months of 2018. Those losses will make it even more difficult for the company to continue servicing its €4.7 billion debt pile

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