Energy provider Electrawinds rescued from bankruptcy

Renewable energy provider Electrawinds was pulled back from the brink of bankruptcy yesterday as creditors agreed to a rescue plan, which was then approved by the Ostend commercial tribunal.

Under the deal, the Liège-based Tecteo – a consortium of municipal authorities known as an intercommunal – will take over all wind energy activities of Electrawinds in Belgium and France for the symbolic sum of €1. Tecteo will also take on most of Electrawinds’ €100 million debt; Electrawinds is now left with a manageable €3 million in debt. Electrawinds’ other activities, including wind energy in other countries, and a loss-making biomass business, remain in control of the company.

Most of the company’s investors have suffered severe losses along the way except for the co-operative Groenkracht, which was allowed to walk away with 86% of its investment to be repaid in three tranches. Analysts are noting that the Bruges-based company is receiving preferential treatment despite its investment of subordinated loans – a high-risk, high-yield instrument that is supposed to rank behind other debts in the event of liquidation or bankruptcy.

By comparison, only 29%  of the €150 million total investment made by government concerns – including the Flemish and federal governments,  Gemeentelijk Holding and the state-owned Belfius bank – will be reimbursed. Electrawinds chair Dirk Vermeersch pointed out that none of the other creditors complained about the deal given to Groenkracht, and the court allowed the package to go ahead.

The deal also covers the workforce of Electrawinds: 30 of the 43 employees will become Tecteo employees, while 12 remain in what is left of Electrawinds.

photo courtesy De Standaard