Current:Home > ScamsWood pellet producer Enviva files for bankruptcy and plans to restructure -FundPrime
Wood pellet producer Enviva files for bankruptcy and plans to restructure
View
Date:2025-04-14 01:49:22
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! (7952)
Related
- Alex Murdaugh’s murder appeal cites biased clerk and prejudicial evidence
- Rachael Ray fans think she slurred her words in new TV clip
- 2 Phoenix officers shot, 1 in critical condition, police say; suspect in custody
- Jesse Metcalfe Reveals Status of John Tucker Must Die Friendships Ahead of Sequel
- What to watch: O Jolie night
- 2 Phoenix officers shot, 1 in critical condition, police say; suspect in custody
- New York man gets 13 months in prison for thousands of harassing calls to Congress
- No prison time but sexual offender registry awaits former deputy and basketball star
- As Trump Enters Office, a Ripe Oil and Gas Target Appears: An Alabama National Forest
- How does the birth control pill work? What you need to know about going on the pill.
Ranking
- 2 killed, 3 injured in shooting at makeshift club in Houston
- Florida ‘whistleblower’ says he was fired for leaking plans to build golf courses in state parks
- Ezra Frech wins more gold; US 400m runners finish 1-2 again
- Grand Canyon pipeline repairs completed; overnight lodging set to resume
- Tom Holland's New Venture Revealed
- Inside Leah Remini and Angelo Pagán's Unusual Love Story
- Ryan Reynolds honors late 'Roseanne' producer Eric Gilliland: 'It's a tragedy he's gone'
- Kristin Juszczyk Shares Story Behind Kobe Bryant Tribute Pants She Designed for Natalia Bryant
Recommendation
Average rate on 30
'Bachelorette' finale reveals Jenn Tran's final choice — and how it all went wrong
Kristin Juszczyk Shares Story Behind Kobe Bryant Tribute Pants She Designed for Natalia Bryant
Many think pink Himalayan salt is the 'healthiest' salt. Are the benefits real?
Jorge Ramos reveals his final day with 'Noticiero Univision': 'It's been quite a ride'
Police in Hawaii release man who killed neighbor who fatally shot 3 people at gathering
Pregnant Gypsy Rose Blanchard Shares Glimpse at Her Baby in 20-Week Ultrasound
Arkansas judge convicted of lying to feds about seeking sex with defendant’s girlfriend