Shares in Spain's renewable energy giant Abengoa soared Tuesday on the Madrid exchange after a source close to debt talks said creditors had agreed to keep financing the troubled company.

Abengoa B shares shot up 29.6 percent, having already risen by 56 percent on Monday.

Abengoa is on a March 28 deadline to restructure its debt and avoid bankruptcy. If it goes under, it would be one of Spain's biggest corporate failures ever.

Abengoa itself has said that it needs 826 million euros this year and another 304 million in 2017 to avoid bankruptcy.

The source said bondholders and lenders now stood ready to inject almost one billion euros ($1.1 billion) into the company over this year and next to keep it going, and a debt deal could be struck by the end of this week.

Abengoa's debt mountain stood at 9.4 billion euros at the end of 2015.

Debt talks are expected to be facilitated by Abengoa sacking its chairman last week to make way for a successor, Antonio Fornieles Melero, who is seen as more acceptable to banks than Jose Dominguez Abascal who was pushed out after just five months in the job.

In November the world player in solar and wind power, biofuels and water management announced it was close to bankruptcy following years of unsustainable expansion and filing for protection from creditors.

In September Abengoa had already sacked a chairman, Felipe Benjumea, who is the founder's son and ran the company for 25 years.

The Benjumea family still controls 51 percent of the company that employees 28,700 people worldwide, according to data from the stock market regulator CNMV.

But a source close to the debt talks said that if Abengoa avoids bankruptcy and the restructuring approved by 75 percent of creditors, the deal would see existing shareholders reduced to a 5 percent stake and 95 percent go to banks and bondholders.

laf/rl/mt

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