Spanish Renewable Energy Firm Abengoa Is Solyndra 2.0?
The Spanish renewable energy company Abengoa, which received $230 million in subsides from the Obama Administration, has seen its bonds fall for five days in a row, Zerohedge reported yesterday, leading to speculation that the company may soon be facing a decision to file for bankruptcy. The bonds of the company are now trading at record lows, or about 45 cent on the dollar.
“Block & Leviton LLP (www.blockesq.com), a Boston-based law firm representing investors nationwide, is investigating possible securities law violations by Abengoa SA and its officers and directors,” MarketWatch reported two days ago.
MarketWatch reported that Abengoa has made apparently contradicting reports regarding its assets and cash flow between July and August of this year, suggesting that “it seemed to call into question Abengoa’s May 2015 representations that it had at least 400 million of undrawn working capital lines.”
Block & Leviton will seek to determine if Abengoa violated federal securities laws with their actions and disclosures earlier this year.
Additionally, the U.S. Customs and Immigration Service and the Department of Labor are investigating Abengoa, the Washington Free Beacon has reported.
“Former employees of the company have alleged that it routinely engages in violations of U.S. immigration, environmental, and workplace safety laws and uses taxpayer funds to hire foreign workers in violation of federal regulations,” the Washington Free Beacon reported.
Abengoa is a Spanish company that invests in research in sustainable energy technologies, including concentrated solar power, second generation biofuels, and desalination. In 2014, the company and its subsidiaries employed more than 20,000 and operated in more than 80 countries.
The failure of Solyndra had become a concern at the Obama White House, the Inquisitr reported in 2011. During that year, Solyndra filed for bankruptcy and shut down operations completely on September 1, 2011.
The proposed but not yet developed Cape Wind project has been held up as another possible Solyndra, the Inquisitr reported last month. The project is likely to have failed because the electricity it would have generated was set to sell for almost three times the current market rate for electricity. After the two electric utilities, which had previously agreed to purchase most of the electricity it would have generated, announced they were canceling the agreement with Cape Wind, the project is likely to be finished. Critics will suggest this is another failed renewable energy project because it failed to generate energy at a price that was competitive in the marketplace.
Is it possible that government efforts, through subsidies and loan guarantees, to bring about success in renewable energy ventures may not succeed until renewable energy is more viable to compete in the marketplace? Failure like Solyndra, Cape Wind, and possibly Abengoa might at least demonstrate government programs for renewable energy are not viable.
[Photo of Abengoa solar project by Denis Doyle / Getty Images.]