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Enviva Files For Bankruptcy

By Audrey Elsberry, posted Mar 13, 2024
Enviva, which has two wood-pellet storage facilities at the Wilmington port shown above, filed for Chapter 11 bankruptcy. (File photo)
Enviva Pellets, a supplier of wood pellets used for energy generation with a presence at the Port of Wilmington, filed for bankruptcy, company officials announced this week.

The Maryland-based company began voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the Eastern District of Virginia on Tuesday, according to a statement released late Tuesday night. The company is the largest wood pellet supplier in the world. With 10 plants across the Southeast, Enviva has leased a storage facility and terminal at the Port of Wilmington since 2016, according to Enviva’s website.

In the news release, Enviva officials detailed the restructuring plan. The company entered into two Restructuring Support Agreements aimed at reducing the company's debt by about $1 billion and strengthening liquidity, the release stated. The restructuring is projected to be completed during the fourth quarter of 2024, officials stated in the release. 

The company did not address in its statement what would happen to its long-standing tenancy at the Wilmington port, and N.C. State Ports officials said Wednesday afternoon that they did not have a statement about Enviva's announcement. The restructuring would pause development of a $250 million facility in Bond, Mississippi, though the company plans to continue building a wood-pellet plant in Alabama, according to the release.

In recent months, the company has undergone significant financial losses and criticism on its environmental claims. The company filed a report in January that it was no longer in compliance with the New York Stock Exchange and was in danger of being delisted. 

Much of the financial troubles of the wood pellet supplier stem from the contracts it currently has with customers.

“Using such volumed to satisfy delivery obligations under such contracts would not cover our loss on the purchases under the Q4 2022 Transactions,” Enviva’s third-quarter earnings filings read, “and would have a negative impact on our profitability, cash flows, and liquidity.”

A class-action lawsuit was filed in the U.S. District Court of Maryland against the company in 2022 for its environmental and financial claims. Stockholders accused the company of misrepresenting the environmental effects of the production and procurement of its wood pellets, as well as overstating the true measure of cash flow, according to court documents.
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