{"id":31161,"date":"2018-02-18T14:02:45","date_gmt":"2018-02-18T19:02:45","guid":{"rendered":"http:\/\/olduvai.ca\/?p=31161"},"modified":"2018-02-18T14:02:45","modified_gmt":"2018-02-18T19:02:45","slug":"on-closer-inspection-debt-of-bankrupt-spanish-construction-firm-grows-four-fold","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=31161","title":{"rendered":"On Closer Inspection, Debt of Bankrupt Spanish Construction Firm Grows Four-Fold"},"content":{"rendered":"
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On Closer Inspection, Debt of Bankrupt Spanish Construction Firm Grows Four-Fold<\/a><\/h3>\n<\/header>\n
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What happens if cases like this prove to be the rule rather than the exception?<\/strong><\/p>\n

Spain appears to have a brand-new Abengoa \u2014\u00a0the imploded energy giant whose fabulous accounting tricks<\/a> pushed creditors into a black hole \u2014 on its hands:\u00a0Isolux was until recently a fairly large privately owned infrastructure company with operations spanning the globe.<\/p>\n

When the group declared bankruptcy last July, its cash flow in Spain was barely enough<\/a> to cover a month\u2019s operating costs. The group had a a total workforce of 3,884<\/a> and 119 infrastructure projects under development of which 39 were still operational and the remaining 90 had been halted.<\/p>\n

The company tried to reduce its debt addiction through agreements with investment funds but they fell through. It also made two attempts to go public, in Brazil and Spain. Both failed.<\/p>\n

The bankruptcy proceedings affected seven subsidiaries. At the time, the company stated that it owed \u20ac405 million to suppliers, that its total financial debt \u2014 including those companies not included under the Spanish Insolvency Act filing \u2014 was \u20ac1.3 billion, of which \u20ac557 million was associated with project financing, and that the total deficit on the group\u2019s balance sheet was about \u20ac800 million.<\/p>\n

<\/ins>Turns out,\u00a0according to<\/a> the bankruptcy receivers, the shortfall is actually \u20ac3.8 billion \u2014 four-and-a-half times the company\u2019s original estimate \u2014 and the group\u2019s total debt, at \u20ac5.7 billion, is over \u20ac4 billion more than the amount stated by the company 10 months ago.<\/p>\n

This amount does not include the group\u2019s dual or contingent liabilities. The receiver\u2019s report concludes<\/a> that the current situation will probably culminate in the liquidation of the entire group.<\/p>\n

How did all this come to pass? According to the receiver\u2019s report, the collapse of the real estate bubble in Spain and the drastic reduction in public work tenders during the crisis led Isolux to massively expand its international operations, as many large Spanish companies did<\/a> in the aftermath of the housing bubble collapse.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

On Closer Inspection, Debt of Bankrupt Spanish Construction Firm Grows Four-Fold What happens if cases like this prove to be the rule rather than the exception? Spain appears to have a brand-new Abengoa \u2014\u00a0the imploded energy giant whose fabulous accounting tricks pushed creditors into a black hole \u2014 on its hands:\u00a0Isolux was until recently a […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[10933,1361,1806,195,5660,3076,743,4255],"class_list":["post-31161","post","type-post","status-publish","format-standard","hentry","category-economics","tag-abengoa","tag-bankruptcy","tag-bubble","tag-debt","tag-don-quijones","tag-insolvency","tag-spain","tag-wolfstreet"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/31161","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=31161"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/31161\/revisions"}],"predecessor-version":[{"id":31162,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/31161\/revisions\/31162"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=31161"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=31161"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=31161"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}