By Julien Toyer and Carlos Ruano
MADRID (Reuters) - Creditor banks are ready to extend a 210 million euro ($229 mln) lifeline to debt-laden Spanish energy and engineering firm Abengoa over the next six weeks in exchange for a new viability plan, two sources said on Tuesday.
The banks' move is the latest twist in talks that began last month to ensure that Abengoa stays afloat and avoids becoming Spain's largest-ever bankruptcy.
Banks, including Santander , HSBC and Credit Agricole , which funded Abengoa's transformation from a 70-year-old local engineering business into a renewable energy giant operating across four continents, are still reluctant to pour more money into the firm, whose opaque financial structure has unsettled investors.
At an inconclusive meeting on emergency financing on Monday, lenders insisted that Abengoa should obtain alternative funding by its own means. New talks are due to take place on Wednesday.
But if no solution is found, lenders are ready to disburse 110 million euros in December, in time to pay salaries and keep the company running, as well as an additional 100 million euros next month if Lazard, which is advising Abengoa, puts forward a credible restructuring plan by Jan. 18, the sources said.
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The banks have also approached Spain's government lending arm, the Official Credit Institute (ICO), about a potential loan of 15 million to 20 million euros as part of the 110 million euro credit line, the sources added.
The creditor banks were also holding talks on Tuesday with international investment funds about a potential participation although the funds are unlikely to accept, the sources said.
Abengoa, the banks and ICO declined to comment.
The Seville-based firm, which has biofuel and solar-heated power plants in the United States, triggered pre-insolvency proceedings last month after a key investor backed away from a plan to inject about 350 million euros.
There was further evidence of Abengoa's shaky finances in the latest annual accounts of its majority shareholder, according to a document seen by Reuters on Tuesday.
Inversion Corporativa (IC), the vehicle through which Abengoa's founding family - the Benjumea - and its business partners, control the company, put up a third of its roughly 30 percent capital stake as collateral for a 100 million euro loan to an IC subsidiary last year, the document showed.
The holding company, which controls 57 percent of the voting rights in Abengoa, entered pre-insolvency in November at the same time as the energy firm and 30 other partners, a spokesman for Abengoa told Reuters.
The class A shares used by IC as collateral for the loan carry 20 percent of the votes in Abengoa, meaning that IC's control over Abengoa would weaken greatly if it fails to repay its debts.
IC posted profit of 63.6 million euros in 2014, of which 12.9 million euros was distributed as a dividend, last year's accounts showed.
(Additional reporting by Jose Elias Rodriguez; Editing by David Clarke and Susan Fenton)