Owner’s equity describes the extent of a company’s ownership - specifically, the portion of a company’s value held by the sole proprietor, partners or shareholders with a claim in the business. Owner’s equity is an important measure to help owners understand the value of their stake in their business. Of those three funding approaches, the latter two - owner investments and the business’s earnings - make up the owner’s equity in a business. Without such capital, a business can’t continue to produce goods or services - and the owners can’t withdraw money if the coffers become empty. Most businesses have four primary ways to get the funding they need to support ongoing operations: from external debt, investments by the owner(s), raising venture capital from outside investors, and the business’s earnings. Editing by Alex Chambers and Matthew Davies.East, Nordics and Other Regions (opens in new tab) (Reporting by Robert Smith, additional reporting by Jose Elias Rodriguez in Madrid. The spokesperson said that debt repayments were usually decided towards the end of the year and it is not common practice to put funds in an escrow account. Also at the deal’s roadshow, Abengoa told investors that it had fully drawn a corporate loan facility, leading some to question whether the bond’s proceeds were really put aside to repay the 2016 note. The bonds were ostensibly raised to repay a portion of a EUR500m bond maturing in March 2016, with then CEO Manuel Sanchez Ortega telling investors at the deal’s roadshow that these notes would be tendered after the summer.Ībengoa said last month that it was now not likely to buy back the bonds until the fourth quarter, however.īut the April bond proceeds were not placed into an escrow account for this purpose. It is now bid at 92.80 and yields 9%, according to Tradeweb prices, having slipped as low as 89.50 earlier this month. But the paper has slumped in the secondary market. “As that’s not really an option at the moment, I guess this is the one easy lever they have to pull,” he said.Ībengoa priced the bond at a 97.954 discount to yield 7% and many expected the company to tap it for additional funds if its price appreciated. The Abengoa spokesperson said that the shares were borrowed from and returned to Inversion Corporativa without using them as a collateral or guarantee for any financing. “While there is no confirmation that the shares were indeed used to get access to funding, it would be very surprising and worrying at the same time,” reads the note. Several investors said they did not think this was a coincidence, with the Berenberg note speculating that the shares could have been used as collateral to back a margin loan to fund participation in the capital raising. The capital raising funded an acquisition of project companies from Abengoa. Inversion Corporativa is a holding company whose owners include members of the families that founded Abengoa.Ī note published by Berenberg’s fixed-income sales and trading desk this week argues that this share borrow raises “questions excess liquidity” of Abengoa.Ībengoa borrowed the shares on the same day it agreed to subscribe to 51% of the EUR600m capital raising at its US-listed yieldco Abengoa Yield. One bond investor noted that on May 8 Abengoa borrowed 95m B shares from its majority shareholder Inversion Corporativa, equivalent to around 10% of its stock and worth around EUR275m at that day’s market prices. Recent activity in the company’s treasury stock has also drawn scrutiny in recent weeks.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |