All indications are Abengoa Bioenergy SA continues normal operations at its ethanol plants in the United States despite questions about the Spain-based company’s financial health.
Abengoa Bioenergy SA filed for protection from its creditors last week, and there were questions about what a potential pending bankruptcy would mean for the company’s ethanol plants in the United States.
In an email to DTN/The Progressive Farmer, a company spokesperson in Spain stated, “All Abengoa plants will continue their normal course of operation and there are currently no plans to stop production.”
According to a story in Ethanol Producer Magazine on Tuesday, Abengoa had idled for maintenance and other work its plants in York and Ravenna, Nebraska, as well as the company’s cellulosic ethanol plant in Hugoton, Kansas. But the closures were unrelated to the company’s financial situation.
Bob Dinneen, president and chief executive officer for the Renewable Fuels Association, told DTN in an interview Wednesday he couldn’t comment directly on Abengoa’s financial health. However, he said the company is important to the biofuels industry as a whole.
“They are a great company,” he said. “I’ve got great confidence in their technology. I suspect they will right this ship. It’s a multi-faceted company. I’m certain they will come through this.”
Abengoa is one of a handful of companies that have launched commercial-scale cellulosic ethanol production in the United States over the past 18 months. Earlier this year, the company began production at a plant designed to use wheat straw and switchgrass among other feedstocks in Hugoton.
Abengoa also operates ethanol plants in Portales, New Mexico; Colwich, Kansas; and in Granite City and Mount Vernon, Illinois. The company also operates a pilot-scale biomass plant in York, Nebraska.
Including the Hugoton biomass plant, Abengoa has a biofuel production capacity of more than 370 million gallons per year, making it one of the largest producers in the United States.
Earlier this week, Reuters reported the company continues to attempt to work out agreements with its creditors that would allow the company to remain viable.
The Street.com, a website that tracks companies’ stock performance, Thursday rated Abengoa stock as “sell.”
“This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover,” The Street said in a report on Abengoa.
“ABY’s stock share price has done very poorly compared to where it was a year ago … Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter.”
Abengoa is one of the world’s top builders of power lines in Latin America and a top engineering and construction business, as well as building renewable-energy power plants from Kansas to the U.K. The company reportedly filed for protection from creditors after a Spanish investment firm called off plans to provide the company with a cash injection.
In a filing with the U.S. Securities Exchange Commission last week, the company indicated it was struggling to remain financially viable.
“…The company announces that it has received notice from Gonvarri (potential Abengoa investor) that the framework agreement is terminated considering that the conditions to which that agreement was subject have not been satisfied,” Abengoa said in the SEC filing.
“The company will continue negotiations with its creditors with the objective of reaching an agreement that ensures the company’s financial viability…”