Last checked at 
(Adds shares, analyst comment, background)
By Jose ElÃas RodrÃguez and Sonya Dowsett
MADRID, Sept 24 (Reuters) - Spanish energy company Abengoa said on Thursday its major creditors hadagreed to back most of a 650 million euro ($728 million) sharesale in a deal providing vital funds to cut debt and cover cashflow needs.
The Seville-based engineering and renewable energy firm,which has biofuel and solar-heated power plants in the UnitedStates, had lost over half its market value since the shareissue was announced in early August on concerns banks would notunderwrite it.
Banks Santander, HSBC and Credit Agricole would back the cash call for up to 465 million euros ($522 million), the company said on Thursday. Its shares roseover 10 percent when the market opened before retreating toWednesday's closing levels. Bonds rallied strongly.
"This is a positive development for Abengoa after (previous)news that the banks were not willing to underwrite the capitalincrease. However we think it will take time and delivery of thegoals to regain investor confidence," said Nuno Estacio, analystat Haitong Research.
Shareholder Inversion Corporativa, run by the foundingBenjumea family, will invest at least 120 million euros in thecapital hike, while U.S. fund manager Waddell & Reed will invest65 million euros through its funds, the company said.
Inversion Corporativa has agreed to cap its voting rights at40 percent after the share issue and will lose its majoritystatus.
Executive Chairman Felipe Benjumea, whose father founded thecompany, will step down after 25 years in the position to bereplaced by Jose Dominguez Abascal, the company's former chieftechnology officer, in a non-executive role.
CULTURE CHANGE?
"The departure of (Felipe) Benjumea was the main stumblingblock in the talks, not the price," said one source withknowledge of the negotiations. "The move clears the horizon forthe company as it signals a change of culture."
The former chairman's father, Javier Benjumea, foundedAbengoa in 1941 with three friends and other family members toundertake electrical supply projects. Felipe, his son, took overthe chairmanship from him in the early 1990s.
Abengoa, which issued a profit warning in July, said itwould cancel its dividend, step up asset sales and capinvestments as part of the refinancing plan while making debtreduction a priority.
The company will hold a conference call at 1300 CET (1100GMT) to give more detail on the moves, but will not answerquestions afterwards, it said. It will hold a shareholders'meeting on Oct. 10 to approve the issue, it said.
Abengoa, whose debt is rated below investment grade by majoragencies Moody's and S&P, wants to cut debt and improve itsrating. Net debt was 6.6 billion euros at end June, dwarfing amarket value of less than 1 billion euros.
Abengoa's bonds traded up strongly in the secondary marketon Thursday on news of the creditor backing but remained atdeeply distressed levels.
The company's 375 million euro 7 percent 2020 note traded upfrom a cash price bid of 37 to 53, just over half of its facevalue and equating to a yield of 25 percent. ($1 = 0.8917 euros) (Additional reporting by Julien Toyer and Tomas Cobos in Madridand Robert Smith in London; Writing by Sonya Dowsett; editing byAdrian Croft)
