Enviva Inc., a producer of wood-based biomass, disclosed the execution of two Restructuring Support Agreements (RSAs) with its creditors, aiming to reduce its debt by approximately $1 billion. These agreements have received support from an ad hoc group representing significant portions of Enviva's debt, including about 72% of its senior secured credit facility, 95% of its 2026 senior notes, 78% of bonds for its Epes, Alabama plant, and 45% of bonds for its Bond, Mississippi project. Another RSA involves holders of more than 92% of the Bond project bonds.
To facilitate this restructuring, Enviva and some subsidiaries have initiated voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the Eastern District of Virginia. The company has also secured $500 million in debtor-in-possession financing from the ad hoc group to support operations during the restructuring and to contribute to the completion of the Epes facility.
Interim CEO and CFO Glenn Nunziata noted the restructuring as a key step in Enviva's business transformation, aimed at improving profitability and optimizing its capital structure. The company plans to complete the restructuring by the fourth quarter of 2024, with the Epes plant expected to be operational in the first half of 2025. Development of the Bond project is currently paused, with plans to reassess post-restructuring based on customer contracting.
Under the RSA terms, existing equity holders will receive 5% of the common equity in the reorganized company post-Chapter 11, plus warrants for an additional 5% of the equity, subject to dilution from future equity issuances approved by the court.
Enviva has communicated with the NYSE to maintain its common stock listing throughout the restructuring, provided it meets the exchange's minimum standards.
