BY Fraser Tennant
Aiming to reduce its debt by approximately $1bn, wood-based biomass producer Enviva Inc. has filed for Chapter 11 bankruptcy so that it may implement two restructuring support agreements (RSAs) with its creditors.
The RSAs have broad support across the company’s capital structure and are designed to improve profitability, strengthen liquidity and better position the business for long-term success as the world’s largest producer of industrial wood pellets.
The restructuring is targeted to be completed during the fourth quarter of 2024.
Enviva has also secured commitments for $500m in debtor-in-possession (DIP) financing and other financing accommodations, a portion of which will be allocated by the company to eligible stockholders in accordance with a syndication process that is subject to court approval.
The DIP facility is expected to provide, subject to court approval, sufficient liquidity to support continued operations across Enviva’s business throughout the restructuring process.
“These agreements represent a significant milestone in the ongoing process to transform our business, as we focus on improving profitability, reducing costs, enhancing asset productivity and optimising our capital structure,” said Glenn Nunziata, interim chief executive and chief financial officer at Enviva. “We look forward to emerging from this process as a stronger company with a solid financial foundation and better positioned to be a leader in the future growth of the wood-based biomass industry.”
The world’s largest producer of industrial wood pellets, Enviva owns and operates 10 plants with annual production of approximately 5 million metric tonnes in Virginia, North Carolina, South Carolina, Georgia, Florida and Mississippi, and is constructing its 11th plant in Epes, Alabama.
The company sells most of its wood pellets to customers located primarily in the UK, the European Union and Japan, helping to accelerate the energy transition away from conventional energy sources and reduce greenhouse gas emissions on a lifecycle basis in hard to abate sectors such as steel, cement, lime, chemicals and aviation.
Enviva expects to continue to pay suppliers in the ordinary course for authorised goods received and services provided after the Chapter 11 filing.
Mr Nunziata concluded: “We appreciate the support of our lenders, vendors and customers, and the tremendous efforts of our entire team as we continue to execute our transformation plan.”
News: Enviva announces Restructuring Agreements amid Chapter 11 proceedings