SHAREHOLDER ALERT: Pomerantz Law Firm Announces the Filing of a Class Action Against Abengoa, S.A. and Certain Officers – ABGB

NEW YORK, Sept. 08, 2015 (GLOBE NEWSWIRE) — Pomerantz LLP announces that a class action lawsuit has been filed against Abengoa, S.A. (“Abengoa” or the “Company”) (NASDAQ:ABGB) and certain of its officers. The class action, filed in United States District Court, Southern District of New York, and docketed under 15-cv-06971, is on behalf of a class consisting of all persons or entities who purchased Abengoa American Depositary Shares (“ADSs”) securities between October 17, 2013 and August 2, 2015 inclusive (the “Class Period”).  This class action seeks to recover damages against Defendants for alleged violations of the federal securities laws under the Securities Exchange Act of 1934 (the “Exchange Act”).

If you are a shareholder who purchased Abengoa securities during the Class Period, you have until October 9, 2015 to ask the Court to appoint you as Lead Plaintiff for the class.  A copy of the Complaint can be obtained at www.pomerantzlaw.com.  To discuss this action, contact Robert S. Willoughby at rswilloughby@pomlaw.com or 888.476.6529 (or 888.4-POMLAW), toll free, ext. 9980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and number of shares purchased.

Abengoa is a Spanish multinational corporation with U.S. headquarters in St. Louis, Missouri. Its subsidiaries operate in the energy, telecommunications, transportation, and the environmental arenas. Its website describes it as a Company that “applies innovative technology solutions for sustainability in the energy and environment sectors, generating electricity from renewable resources, converting biomass to biofuels and producing drinking water from sea water.” It further explains that Abengoa’s “business is structured around three activities,” i.e., engineering and construction, concession-type infrastructures and industrial production.

The Complaint alleges that throughout the Class Period, Defendants made false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, since November 12, 2014, Abengoa and certain of its current and former executive officers and directors have misrepresented the liquidity of the Company’s balance sheet in corporate reports filed with the SEC and in conference calls with financial analysts. These misrepresentations artificially inflated the trading price of Abengoa’s ADS. 

On October 17, 2013 the SEC declared effective Abengoa’s Form F-1 registration statement pursuant to which it registered 182,500,000 class B shares for trading in the form of American Depository Shares (“ADSs”) (the “F-1”).  Each ADS represented the right to receive five Class B shares.  The offering was oversubscribed and ADSs began to trade on NASDAQ on October 17, 2013.  There are reportedly 167.44 million ADSs available for trading on NASDAQ in the United States.

As a Company engaged in large engineering projects throughout the world, cash flow and liquidity are significant to Abengoa’s business and profitability.  In the F-1, Abengoa represented that it had “successfully grown our business while seeking to enforce strict financial discipline to maintain our strong liquidity position.”  Throughout the Class Period, Defendants touted Abengoa’s strong liquidity position and sound financial discipline.

On Friday, July 31, 2015, Abengoa announced its results for its first six months of 2015.  That same day, it held an earnings conference call in which it cut its full year free cash flow guidance.  During that conference call, Defendant Santiago Seage sought to assure investors that Abengoa’s cash flow situation was stable and stated that “the company has no plan to . . . tap the capital markets in any manner.”

On August 3, 2015, the Company issued a press release announcing a share issuance plan to raise 650 million euros. The same press release also announced an asset divestiture plan totaling 500 million euros, or 100 million euros more than the Company had announced four days earlier.  Investors learned on August 3, 2015 that Abengoa’s liquidity problems were far worse than portrayed by Seage and Abengoa just a few days earlier.

In fact, from 2013 to 2015, Abengoa masked liquidity problems by manipulating its financial reporting.  By misstating its profit margins and shifting costs from certain projects to make them appear more profitable than they were, the Company understated expenses and overstated profits.  Ultimately, this led to the revealed liquidity problems.  In an article on Bloomberg Business News, dated August 3, 2015, Bloomberg reported that “the predicted shortfall is the latest in a series of announcements that have eroded trust in Abengoa’s accounting methods and ability to generate sufficient cash to service its debt.”  The article quoted a credit analyst at Lucror Analytics Pte Ltd. in Singapore as saying “there were liquidity concerns before and this downward revision of corporate free cash flow guidance is very disappointing.  The capital increase more or less just covers the shortfall.  There are serious liquidity concerns for this company and bondholders believe this measure isn’t sufficient.”  He continued that “the equity increase gives the impression that the company urgently needs cash.” 

On the news that Abengoa’s liquidity problems were worse than represented, the price of Abengoa’s ADSs plunged approximately 46%, (over $5 per share), from its closing price of $11.06 on July 31, 2015, to close at $6.00 on August 4, 2015 on unusually heavy trading.

The Pomerantz Firm, with offices in New York, Chicago, Florida, and Los Angeles, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 70 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com

CONTACT: CONTACT:
Robert S. Willoughby
Pomerantz LLP
rswilloughby@pomlaw.com

Share this post