The decline and restructuring of OHLA

Abstract

OHLA has been one of Spain’s most important concession and public works companies since the early 20th century. Additionally, it achieved a significant presence across almost all of Latin America and the United States because of substantial growth at the end of the previous century. However, the accumulation of an elevated level of debt and the depletion of cash flow sources linked to some of its business segments led to a decline that still persists today. The objective of this study is to analyze the causes of OHLA's decline and the responses implemented by the company from 2015 to the end of 2023, based on the framework of Robbins and Pearce (1992) retrenchment and recovery model. To this end, the study first examines the main academic literature on corporate decline and restructuring. Secondly, segmented analyses of OHLA’s consolidated financial statements are conducted for different periods of the restructuring process, distinguishing between its previous situation, the actions taken, and its current state. This evaluation is conducted using economic-financial analysis tools. The fact that OHLA is a publicly traded company allows access to extensive and detailed information on the entire process. The study is conducted through an analysis of the main academic literature in the field of corporate restructuring and the consolidated financial statements published by OHLA’s parent company in the CNMV (Spain's National Securities Market Commission.