Industrial Wood Pellets Producer Enviva Files For Bankruptcy - What's Going On?

Industrial wood pellets producer Enviva Inc. EVA and certain of its subsidiaries have commenced voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the Eastern District of Virginia.

The company also discussed a restructuring plan that is expected to reduce debt by approximately $1 billion, improve profitability, and better position its business. Enviva has entered into two Restructuring Support Agreements, or RSAs.

One RSA is with an ad hoc group of holders 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, and approximately 45% of bonds related to its greenfield project near Bond, Mississippi.

Enviva also entered into a second RSA with certain holders representing more than 92% of bonds related to the Bond project.

The company has also secured commitments for $500 million in debtor-in-possession financing and other financing accommodations from the Ad Hoc Group.

“These agreements with our lenders and noteholders represent a significant milestone in the ongoing process to transform our business, as we focus on improving profitability, reducing costs, enhancing asset productivity, and optimizing our capital structure,” Glenn Nunziata, Interim Chief Executive Officer and Chief Financial Officer commented. 

The restructuring is targeted to be completed during the fourth quarter of 2024. Enviva plans to continue constructing its Epes plant throughout the process, with an in-service date expected to be during the first half of 2025.

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Price Action: EVA shares are trading higher by 4.8% to $0.63 on the last check Wednesday.

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