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Enviva Inc., which operates a plant in Southampton County and marine terminal operations in Chesapeake, announced on March 15 that the U.S. Bankruptcy Court for the Eastern District of Virginia has approved $500 million debtor-in-possession (DIP) financing related to its Chapter 11 bankruptcy filing. The in-court restructuring process is targeted for completion in the fourth quarter of 2024. 

The company announced on March 12, 2024, that it entered into two Restructuring Support Agreements (“RSAs”): one RSA with a 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, and a second RSA with certain holders representing more than 92% of bonds related to the Bond, Mississippi project.

According to the company, these RSAs were designed to support an expedited restructuring to reduce the Company’s debt by approximately $1 billion, improve profitability, strengthen liquidity, and better position the business for long-term success. Enviva also says there will be no interruption of operations throughout the restructuring process. 

“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 said. “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. We appreciate the support of our lenders, our vendors, and our customers, and the tremendous efforts of our entire team as we continue to execute our transformation plan.”

Back in November, The Tidewater News reported that Enviva was experiencing financial difficulties. In a statement, Enviva indicated that it had plans to improve productivity and reduce costs related to its operations. Regarding the Southampton plant, Enviva permanently shut down an underperforming dryer line so that the plant could operate more reliably and cost-effectively.

Enviva owns and operates ten plants in Virginia, North Carolina, South Carolina, Georgia, Florida, and Mississippi and is constructing its 11th plant in Epes, Alabama. Enviva exports its wood pellets to global markets through its deep-water marine terminals at the Port of Chesapeake, the Port of Wilmington, North Carolina, and the Port of Pascagoula, Mississippi, and from third-party deep-water marine terminals in Savannah, Georgia, Mobile, Alabama, and Panama City, Florida.