Enviva Announces Restructuring Support Agreements to Strengthen Its Financial Position
On Tuesday, Enviva, a producer of sustainably sourced wood-based biomass, announced that it has entered into two Restructuring Support Agreements (“RSAs”).
- The first RSA is with an ad hoc group of holders (the “Ad Hoc Group”) representing approximately 72% of its senior secured credit facility, approximately 95% of its 2026 senior notes, approximately 78% of bonds related to its Epes, Alabama, plant currently under construction (“Epes”), and approximately 45% of bonds related to its greenfield project near Bond, Mississippi (“Bond”).
- The second RSA is with certain holders representing more than 92% of bonds related to the Bond project.
The RSAs have broad support across Enviva’s capital structure and are designed to support an expedited restructuring to reduce the company’s debt by approximately $1.0 billion, as well as improve profitability, strengthen liquidity, and better position the business for long-term success as the world’s largest producer of industrial wood pellets.
To implement this pre-arranged restructuring, Enviva and certain of its subsidiaries have commenced voluntary Chapter 11 proceedings in the US Bankruptcy Court for the Eastern District of Virginia (the “Court”). The company has also secured commitments for $500 million in debtor-in-possession financing (“DIP Facility”) and other financing accommodations from the Ad Hoc Group, 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, as well as help fund the completion of Epes.
The restructuring is targeted to be completed during 2024Q4, and throughout the process, Enviva plans to continue constructing its Epes plant, with an in-service date expected to be during the first half of 2025.
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