Wood pellet producer Enviva files for bankruptcy and plans to restructure

abcnews.go.com:

The largest industrial wood pellet supplier in the world has filed for Chapter 11 bankruptcy

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