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Benjumea: the decline of the great Andalusian family

2021-09-27T22:54:03.459Z


The business clan came to accumulate a fortune of 1,500 million that disappeared with the bankruptcy of Abengoa


The brothers Felipe (left) and Javier Benjumea, in a ceremony in Seville in 2007.

Eighty years after creating the giant Abengoa, the Benjumea family fights to stay afloat after caressing glory.

Hydrogen is his current bet, but while he battles with the bank to recover the lost capital in the Andalusian multinational -which reached 1,500 million-, its leader, Felipe Benjumea, defends himself from two legal charges that scrutinize his risky management for 24 years as president.

The Sevillian engineer Javier Benjumea Puigcerver founded Abengoa in 1941 with a capital of 180,000 pesetas together with his partner José María Abaurre. After decades of sustained growth as an electrical and engineering project company, in 1991 his son Felipe Benjumea took up the baton to multiply his business ambition and become a world leader in renewable energies. A throne that he achieved at the cost of excessive leverage until 2015, when the firm presented a pre-bankruptcy asphyxiated by a debt that reached 25,000 million.

Six years later, Abengoa is today with the shares suspended from trading and waiting for a state aid of 249 million to underpin the only offer on the table to avoid the closure and definitive dismissal of 11,379 employees, 2,503 of them in Spain. What made this family with an aristocratic past fall away from power by the creditor banks?

“Felipe is tremendously ambitious and megalomaniac, he wanted to be in the Champions League and he did it by playing it every day. In a very short time and without capital, he won impossible games and was correct the vast majority of the time. But it fell because the market withdrew its confidence and it did not have capital from an industrial partner behind it, after refusing to dilute. He was a prisoner of the family dividend ”, explains a former director who worked alongside him and demands to preserve his identity. A dozen executives of the group are denounced in court, hence the anonymity prevails over the turbulent stage in which the dream of infinite international expansion was shattered.

During those years of growth, the president refused to increase capital so as not to lose control of the ship and maintain 51% of the political rights held by Inversión Corporativa (IC), the firm owned by the Benjumea along with other powerful Andalusian families such as the Abaurre, the Olajangua and the Aya. Today that 51% has dropped to 1.78% after the traumatic reconversions of the multinational, on a diet to demediate its workforce that reached 26,400 workers and reduce the debt to 4,783 million at the end of 2019.

The founder of Abengoa had 12 children, two of whom were boys and heirs after the father's retirement. “In a conservative family where almost all of them were women and whose father wanted them to be wives of, Felipe appears. A guy with ideas, pushed forward and who is not satisfied with a great company, but tries to be the best and compared himself to Entrecanales and Florentino, ”says another former senior manager. His charming and expansive brother Javier limited himself to directing the group's institutional relations.

With Benjumea at the helm, the profits of the shareholder families grew exponentially: “Those families give themselves to Felipe because the dividend is multiplied by five and he becomes God.

Abengoa had a very old and complex management structure, where the directors did not paint anything and the company depended on a single man ”, adds this executive.

To keep the helm in the last years of his mandate, Benjumea agreed to increase capital but created the A and B shares, the latter with limited voting capacity, to continue controlling the multinational's boards of directors.

Meanwhile, the liability grew and grew.

"Abengoa's debt was associated with a project, and as it hoped to sell it in the future, it was an ongoing debt and that is why it was not accounted for," illustrates another former senior official.

On this dizzying path to being a world leader in renewables, the firm invested in wind energy in the 1990s, sold early and in 2002 it entered bioenergy with great results.

“The amortization of the plants was very fast, the bank financed the plants for biofuel and you were left with debt in the business group and with cash in the parent company.

And we put it in the solar, but the solar was not as fast and explosive as thought, "says another former director.

Some financiers discussed the imperative line of growth at the expense of debt, but Felipe silenced or fired them.

More information

  • The former president of Abengoa Felipe Benjumea, charged with falsifying accounts

In 2014, the year with the highest market valuation of the group, the Benjumeas' fortune amounted to 1,500 million and they became the richest Andalusian family behind the Alba, according to

Forbes

magazine

.

All the former senior officials consulted praise Benjumea's ambition and sagacity, her incredible work capacity, financial creativity and leadership, but also her bad losing in business. The creditor bank demanded that he be removed from the control room in 2015 to refinance the company, and later the executive claimed 1 billion from Santander and HSBC as compensation for this capital increase, a claim dismissed by a court. In parallel, it sued these two banks for unfair competition in the Mercantile, a case also dismissed, but that Benjumea has appealed.

In his judicial journey, the former president sat on the bench of the National Court for alleged unfair administration by receiving compensation of 11.5 million after his replacement, but was acquitted in 2018. Now the main headache of the former president is both judicial investigations that keep him accused in the National Court and a court in Seville, which are studying a possible makeup of accounts in the megaprojects developed by 600 group companies on five continents.

The former president, 64 years old and with 42 positions in 25 companies according to the Informa.es portal, has refused to comment for this report.

More information

  • And Abengoa could no longer reinvent itself

Not everything is bad news for the Benjumea: Corporate Investment entered bankruptcy in 2018, but it could come out shortly after the Commercial Court 3 of Seville forced the banks to accept the initial appraisal of a stock exchange three weeks ago of land for 2,000 homes in the Andalusian capital for 104 million, which would settle a dation agreement in payment of the debt if the sentence becomes final. The banks (Sabadell, Unicaja, Caixabank, Bankinter and Santander) presented an alternative appraisal for 10 million, but the judge rejected it. "You have to have a lot of courage to declare war on the banks because they turn off the tap if you want to continue with projects," illustrates an executive. While,The family maintains assets of 14 million in two companies with farms dedicated to pig cattle and rainfed and irrigated agriculture.

After his traumatic departure from Abengoa, Benjumea took months to create the firm that he now chairs: H2B2, based on hydrogen technology projects in Spain and the United States.

“Felipe is very persevering, for the good and for the bad.

The banks respected him, but businesses have these things ”, concludes a former councilor of the Andalusian multinational.

Source: elparis

All business articles on 2021-09-27

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