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5 June 2017 – Expansión
On Friday, Isolux took some important steps in its plan to reduce to the maximum the damage caused by its delicate corporate situation. On the one hand, the company’s Board of Directors, chaired by Nemesio Fernández-Cuesta, formulated the accounts for 2016, which saw it record losses of €1,332 million, after the entity recognised provisions and adjustments amounting to €2,853 million.
On the other hand, the company reached a preliminary agreement with the investment fund Oak Hill to transfer it the entire car park business. Sources at the company indicated that the investor held an option to execute a loan of up to €100 million granted in 2015. In theory, Oak Hill’s option was limited to, approximately, half of the business of Isolux Aparcamientos. However, the company and fund have reached an agreement for that option to be extended to include 100% of the subsidiary, in an operation that could see Isolux record revenues of €10 million and deconsolidate debt of €200 million.
The Spanish group first closed an agreement with the fund Oak Hill Capital Partners to jointly develop the business back in 2015. The investment fund undertook to inject €100 million into the company, in the form of a loan allocated entirely to expand the portfolio of assets. In exchange, Isolux granted Oak Hill an option to acquire a stake in the car park subsidiary from 2019 onwards.
Oak Hill’s arrival in 2015 ended a period of uncertainty for this branch of Isolux’s activity, which had been declared available for sale after other attempts to form strategic alliances had failed. At the beginning of 2013, the Spanish group signed a preliminary agreement with the French fund Edifice Capital to invest €150 million between 2013 and 2014. The resources were going to be used to purchase new car parks, with the aim of reaching 50,000 rotating spaces. However, in a surprise move, the French firm did not keep its word and withdrew from the project.
In the meantime, Isolux is pushing ahead with the rest of its divestments, the most high-profile of which is its exit from the transmission lines in Brazil.
On Friday Isolux approved the accounts for 2016, after postponing their formulation on four other occasions, and it did so to coincide with the new process that has been launched to restructure the group and avoid bankruptcy. “The Board of Directors considers that, with the right financial support, Isolux constitutes a viable business project,” said the Board of Directors of the company, which needs new funding and credit lines to ensure its survival.
Feasibility plan
Sources at the company indicate that the auditor, PwC, has not included any qualifications in its report, but that it has included paragraphs to emphasise the link between the operation of the company and the success of Álcarez & Marsal’s feasibility plan. This plan involves segregating the engineering business from the other LoBs and looking for a partner to inject money into the new company, with a portfolio of healthy contracts worth around €1,000 million. The solution requires the support of the plan’s current creditors/shareholders. The group is waiting for a response from Bankia and CaixaBank.
Original story: Expansión (by C. Morán)
Translation: Carmel Drake
