Creditors agree to Isolux Corsan restructuring

The approval clears the way for an immediate €150m cash injection, enabling the Spanish company to resume ‘a normal pace of operations’ under the direction of its newly appointed board and chairman.

Madrid-based developer Isolux Corsan has secured the approval of 89.4 percent of its creditors for its restructuring plan, which will allow for banks to immediately inject €150 million into the company so that it can resume a “normal pace of operations”.

“This support allows requesting court approval […] in order to extend the agreed terms to all financial creditors,” Isolux said in a statement.

The restructuring plan defines three debt tranches. The first is in the amount of €200 million, which includes the imminent €150 million cash injection as well as a previous disbursement of €50 million. However, this amount can be increased by an additional €75 million, Isolux said. 

The second tranche totals €550 million (and up to €750 million), considered to be sustainable debt given the group’s capacity to generate cash. The third, which comes up to €1.4 billion, will be part of the capital structure through different convertible instruments.

Creditor approval has also enabled the company to take the next step under the terms of its restructuring agreement, appointing a new chairman and board.

Nemesio Fernandez-Cuesta is the company’s new chairman, while current chief executive Antonio Portela will remain in place.

To date, Fernandez-Cuesta served as chairman of the monitoring committee of the strategic plan, a position created following the agreement between Isolux’ shareholders and creditors.

He will preside over a newly appointed nine-member executive board, comprising seven independent directors and two executives – Portela and Angel Serrano.

“The new directors have been appointed by the General Meeting of Shareholders held this morning, after the resignation of former Governing Council,” Isolux said. “The permanence of Antonio Portela and Angel Serrano facilitate the transition between the boards and the knowledge of operations.”

In addition to rejigging its debt, Isolux Corsan will also undergo a restructuring, according to Fernandez-Cuesta, who intends to return the company to profitability by focusing on those activities and geographies in which the company has demonstrated a clear competitive advantage.

The move is part of Isolux' efforts to stay in business. The company found itself in financial difficulty following its unsuccessful €850 million bond issue last year, a failure partly attributed to allegations of money laundering, tax evasion and forgery that have plagued the company for some time and resulted in an investigation.

Last May, Isolux Corsan sold part of its concessions business – its toll roads and WETT, a transmission line in Texas – to Canadian pension fund manager PSP Investments, which already owned 19.23 percent of Isolux Infrastructure.

Isolux Corsan retained all the solar PV projects of T-Solar, another company it is in the process of selling, and the power transmission and distribution assets of Isolux Infrastructure. In addition to T-Solar, Isolux is also looking to sell 10 transmission lines in Brazil.