In recent weeks, Isolux Corsan has been engaging with its core banks and their advisers, Jones Day and KPMG, and the ad hoc group of bondholders and their advisers, Linklaters and PJT. Those discussions have resulted in the restructuring proposal. The company is confident it will obtain the necessary majorities to implement the transaction principally by way of Spanish homologation.

To that end, a Master Restructuring Agreement and related proxy/consent materials will be distributed to creditors for accession around mid July and the Company will submit its application seeking homologation of the MRA to the Spanish courts no later than July 29^th. Once the MRA obtains the formal approval of the required majority, a group of banks will inject new funds in the Group to secure the viability of the business going forward, which has been affected in the first quarter by the financial difficulties of the group.

The first quarter results of Isolux Corsan show the impact of the lack of liquidity. This is the main driver of the €39 million (US$ 43 million) loss incurred until 31 March. Revenues reached €360 million (US$400 million), 20% lower than the same period last year, and EBITDA dropped to €7 million. The figures are not entirely comparable to those of Q1 2015 as from January 1, 2016, the income statement excludes results generated by the assets that were transferred to PSP as part of the separation process of their subsidiary Isolux Infrastructure.

Despite the difficulties to maintain the contracting level, new orders in Q1 2016 amounted to €404 million (US$ 450 million), which add to the overall backlog of €6,3 billion (US$7 billion).The main contracts awarded in Q1 2016 are two sections of a highway in India for a total budget of €193 million (US$ 215 million). These contracts strengthen Isolux Corsan's position in this emerging market.

The level of corporate debt remained stable at similar levels to those at year-end 2015. The ongoing discussions between the company and its main financial creditors are governed by the strong will to quickly implement a new financial and ownership structure that allows a quick recovery of the pace of operations. During July, the company expects to have all formal approvals and the required majorities to request the formal implementation in Court.

The restructuring plan defines three debt tranches: a first one of €200 million (US$223 million), consisting on new money injected in the business to restore normal pace of operations; a second one of €600 million (US$668 million), which is considered as sustainable debt; and a third tranche, amounting to €1.2 billion (US$1.3 billion) to be implemented through a participating loan that can be partially capitalized. Once the agreement is formalized, a group of banks will provide €150 million (US$167 million), in addition to the €50 million (US$ 56 million) already disbursed, to secure the going concern and finance the costs of the organizational restructuring.