Spanish renewable power project developer Abengoa entered pre-insolvency proceedings this week in what could be Spain’s largest bankruptcy to date.

The move came after an expected €350m capital injection from industrial group Gonvarri Corporación Financiera fell through.

US-based investment bank Citi now faces questions after it brokered the sale of €100m in Abengoa shares in July. Analysts have called the sale “ill-timed”, and have suggested that the bank failed to thoroughly investigate Abengoa’s situation. 

Shares in Abengoa fell by almost 70 per cent after this week’s announcement.

The firm had been seeking new investors since August after its spiralling debt became unsustainable. According to market analysts, the company had taken on too much debt during the years of Spain’s property boom, beginning around 2004, in order to expand its installed base of bioenergy plants and transmission and desalination infrastructure.

Spanish companies entering pre-insolvency protection have up to four months to negotiate with their creditors in hopes of avoiding bankruptcy.