The actions Spanish engineering firm Isolux took to avoid bankruptcy Friday have had no impact on the Interstate 69 Section 5 project, at least not yet.
“At the moment, nothing has changed,” said Jose Maria Ojeda, CEO of I-69 Development Partners, the firm hired by the state to complete the Section 5 project.
I-69 Development Partners hired Isolux Corsan LLC, a Texas-based subsidiary of the Spanish parent company, to design and build the 21 miles of interstate that follow the path of Ind. 37 from Bloomington to Martinsville. On Friday, Reuters news agency reported Isolux activated a formal process to avoid financial insolvency.
Under Spanish law, companies can enter into debt restructuring proceedings that give them up to four months to reach an agreement with creditors to avoid bankruptcy. The company told Reuters that decision would not affect its ability to carry out the infrastructure and energy projects it has in 35 countries.
Isolux has been struggling to stay afloat financially. Last December, the company agreed to a debt restructuring deal with bondholders and banks, such as Banco Santander, Caixabank and Bankia, taking 95 percent of the company in a debt-for-equity swap. On Friday, the company told Reuters it was trying to sell its concession assets and had begun to look for an investor for the holding company that groups the engineering and construction business.
Isolux Corsan has had its own financial issues. Company officials blamed bad soil tests and inadequate federal permits provided by the state for additional work costs. State officials have disputed those claims.
Regardless of the cause, officials with Isolux Corsan said the additional costs led to cash flow problems for the company that resulted in late payments to subcontractors working on the Section 5 project. More than once, subcontractors have stopped working on the project because of payment issues.