US wood pellet producer Enviva published a restructuring plan on 30 August, along with a disclosure statement under its chapter 11 bankruptcy case. Holders of claims and interests entitled to vote on the plan can do so until 6 November. A bankruptcy court hearing to approve the disclosure statement and a backstop motion is scheduled for 4 October.
The deadline to vote on the restructuring plan is 16:00 ET on 6 November. Only holders of claims in class 5 and 6 and interests in class 10 are entitled to vote (see tables).
The disclosure statement is intended to provide voters with information to understand the restructuring plan and its effects on creditors and equity holders. The backstop commitment agreement was executed by debtors and "equity commitment parties" on 30 August to facilitate the rights offering (see key terms, below).
Other stakeholders that initially supported the restructuring — which hold over 82pc of the senior secured credit facility claims, 98pc of 2026 notes claims, 92pc of the Bond plant green bond claims, and 78pc of the Epes plant green bond claims — have agreed to support the plan, subject to terms and conditions of the two restructuring support agreements signed with debtors.
Enviva filed a voluntary petition for chapter 11 bankruptcy on 12 March.
The plan's key terms
• The sale of "reorganised Enviva Inc. interests pursuant to a rights offering" for $250mn of equity rights plus the principal amount of any debtor-in-possession (DIP) financing facility's tranche A claims that choose not to participate in the DIP tranche A equity participation.
Enviva secured the $500mn DIP facility on filing for chapter 11 bankruptcy. The $250mn tranche A could be converted into reorganised equity, while the $250mn tranche B could only be paid in cash at maturity. Holders of tranche A claims can subscribe for the purchase of reorganised Enviva interests on the date the restructuring plan becomes effective, which is expected to allow Enviva to repay the DIP and senior secured credit facility claims in cash.
• Entry into a $1bn "first lien senior secured exit facility";
• The DIP tranche A equity participation;
• Repayment of the DIP tranche A claims;
• Repayment of senior secured credit facility claims in cash;
• Distribution of reorganised Enviva's interests and rights to "participate in the rights offering to the Bond [plant project's] general unsecured claims";
• Distribution of cash that in total equals either $13mn or $18mn — depending on whether certain conditions are met — to holders of non-Bond general unsecured claims; and
• An overbid process "to solicit bids for a value-maximising alternative transaction". The latter might take the form of (a) one or more sales or dispositions of Enviva's assets, or (b) one or more reorganisation transactions involving the debtors and/or the company assets. "Alternative transactions" need to meet certain requirements set out in the final DIP agreement approved by the court.
The debtors looked at other restructuring options, but have concluded the plan submitted will maximise recoveries for stakeholders, Enviva said.
| Enviva's restructuring plan voting classes | |
| Voting class | Name of class under plan |
| Class 5 | Bond general unsecured claims |
| Class 6 | Non-Bond general unsecured claims |
| Class 10 | Existing equity interests |
| - Enviva's court docket | |
| Enviva's classification of claims and interests | ||||
| Class | Claim/Interest | Status | Plan voting rights | Approximate % recovery |
| 1 | Other priority claims | Unimpaired | No, presumed to accept | 100.0 |
| 2 | Other secured claims | Unimpaired | No, presumed to accept | 100.0 |
| 3 | Senior secured credit facility claims | Unimpaired | No, presumed to accept | 100.0 |
| 4 | NMTC claims | Unimpaired | No, presumed to accept | 100.0 |
| 5 | Bond general unsecured claims | Impaired | Entitled to vote | 7.7-7.9 |
| 6 | Non-Bond general unsecured claims | Impaired | Entitled to vote | Pro rata share of an amount of Allowed Non-Bond General Unsecured Claims |
| 7 | Intercompany claims | Unimpaired/Impaired | Not entitled to vote | N/A |
| 8 | Section 510(b) claims | Impaired | Not entitled to vote, deemed to reject | 0.0 |
| 9 | Intercompany interests | Unimpaired/Impaired | Not entitled to vote | N/A |
| 10 | Existing equity interests | Impaired | Entitled to vote | N/A |
| - Enviva's court docket | ||||
