Current:Home > ScamsWood pellet producer Enviva files for bankruptcy and plans to restructure -OceanicInvest
Wood pellet producer Enviva files for bankruptcy and plans to restructure
View
Date:2025-04-17 22:42:08
The largest global industrial wood pellet supplier filed for Chapter 11 bankruptcy protection on Wednesday, announcing its intention to cut about $1 billion of debt by restructuring agreements with creditors, including those who have invested heavily in new facilities.
Maryland-based Enviva said in the filing that its debts exceed $2.6 billion. The company owes $780 million to a Delaware bank, $348 million to a German energy company, as well as $353 million in bonds from local development authorities in Mississippi and Alabama. The announcement came two months after Fitch Ratings downgraded Enviva’s default rating following a missed interest payment of $24.4 million.
“Considerable uncertainty exists regarding Enviva’s ability to renegotiate uneconomic customer contracts” entered into in the fourth quarter of the 2022 fiscal year, the global credit-rating agency said in a Jan. 19 press release.
Over the past 20 years, Enviva worked to meet increasing global demand for alternative energy sources and built 10 wood pellet production plants across the U.S. South, capitalizing on the heavily forested region’s reputation as the world’s “wood basket.”
With increased interest from Asian and European nations ' in burning wood for fuel, Enviva officials had hoped that new plants in Alabama and Mississippi would increase its existing annual pellet production of about 5 metric tons (5.5 tons). Construction will continue at its location in Epes, Alabama, Enviva said in a March 12 statement. But the development of a Bond, Mississippi, facility is pausing until the company finishes restructuring.
“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,” Glenn Nunziata, Enviva’s interim chief executive officer, said in a statement.
New payback plans will be hammered out with one investment group that holds over three-fourths of the bonds related to the Alabama plant and another group with more than 92% of the bonds for the Mississippi plant.
Danna Smith, the executive director of the Dogwood Alliance, celebrated the bankruptcy filing as a sign that what she called Enviva’s “greenwashing tactics and lack of transparency” have caught up to the company.
Smith is among many environmental activists who have long contested Enviva’s claims that its production process — and burning wood for energy — is carbon neutral and helps revitalize rural areas. Opponents argue that the harvesting of forests and burning of wood pellets has a negative overall impact on carbon reserves, while polluting the poor, Black communities often located near the manufacturing plants.
The Dogwood Alliance urged the Biden Administration this fall to prevent wood pellet producers from accessing a tax credit that received additional funding under the Inflation Reduction Act, which marked the most substantial federal investment to date in the fight against climate change.
“Our government must not give one more dime to this failing, dirty industry,” Smith said in a Wednesday statement. “Instead, we need to focus on recovery and transition.”
___
Pollard is a corps member for the Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues.
veryGood! (792)
Related
- Megan Fox's ex Brian Austin Green tells Machine Gun Kelly to 'grow up'
- Guster, Avett Brothers and Florence Welch are helping bring alt-rock to the musical theater stage
- Aw, shucks: An inside look at the great American corn-maze obsession
- A Michigan Senate candidate aims to achieve what no Republican has done in three decades
- Civic engagement nonprofits say democracy needs support in between big elections. Do funders agree?
- Aaron Rodgers injury update: Jets QB suffers low-ankle sprain vs. Vikings
- Here's When Taylor Swift Will Reunite With Travis Kelce After Missing His Birthday
- Supreme Court declines Biden’s appeal in Texas emergency abortion case
- Israel lets Palestinians go back to northern Gaza for first time in over a year as cease
- New 'Menendez Brothers' documentary features interviews with Erik and Lyle 'in their own words'
Ranking
- Working Well: When holidays present rude customers, taking breaks and the high road preserve peace
- Sean “Diddy” Combs’ Mom Janice Defends Him Against “Public Lynching” Amid Sexual Abuse Allegations
- Texas still No. 1 in US LBM Coaches Poll but rest of college football top 10 gets reshuffling
- Minnesota man arrested after allegedly threatening to ‘shoot up’ synagogue
- 2025 'Doomsday Clock': This is how close we are to self
- Don Francisco gushes over Marcello Hernández's 'SNL' spoof of his variety show
- Bachelor Nation's Clare Crawley Shares She Legally Married Ryan Dawkins One Year After Ceremony
- Opinion: Dak Prescott comes up clutch, rescues Cowboys with late heroics vs. Steelers
Recommendation
The FBI should have done more to collect intelligence before the Capitol riot, watchdog finds
How will the Fed's rate cuts affect your retirement savings strategy?
Week 6 college football grades: Temple's tough turnover, Vanderbilt celebration lead way
Fantasy football buy low, sell high: 10 trade targets for Week 6
Juan Soto to be introduced by Mets at Citi Field after striking record $765 million, 15
Kamala Harris, Donald Trump tied amongst bettors for election win after VP debate
Jayden Daniels showcases dual-threat ability to keep Commanders running strong
Nobel Prize in Medicine awarded to Americans for microRNA find