Enviva files for Chapter 11 to implement RSAs

BY Fraser Tennant

Aiming to reduce its debt by approximately $1bn, wood-based biomass producer Enviva Inc. has filed for Chapter 11 bankruptcy so that it may implement two restructuring support agreements (RSAs) with its creditors.

The RSAs have broad support across the company’s capital structure and are designed to improve profitability, strengthen liquidity and better position the business for long-term success as the world’s largest producer of industrial wood pellets.

The restructuring is targeted to be completed during the fourth quarter of 2024.

Enviva has also secured commitments for $500m in debtor-in-possession (DIP) financing and other financing accommodations, a portion of which will be allocated by the company to eligible stockholders in accordance with a syndication process that is subject to court approval.

The DIP facility is expected to provide, subject to court approval, sufficient liquidity to support continued operations across Enviva’s business throughout the restructuring process.

“These agreements represent a significant milestone in the ongoing process to transform our business, as we focus on improving profitability, reducing costs, enhancing asset productivity and optimising our capital structure,” said Glenn Nunziata, interim chief executive and chief financial officer at Enviva. “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.”

The world’s largest producer of industrial wood pellets, Enviva owns and operates 10 plants with annual production of approximately 5 million metric tonnes in Virginia, North Carolina, South Carolina, Georgia, Florida and Mississippi, and is constructing its 11th plant in Epes, Alabama.

The company sells most of its wood pellets to customers located primarily in the UK, the European Union and Japan, helping to accelerate the energy transition away from conventional energy sources and reduce greenhouse gas emissions on a lifecycle basis in hard to abate sectors such as steel, cement, lime, chemicals and aviation.

Enviva expects to continue to pay suppliers in the ordinary course for authorised goods received and services provided after the Chapter 11 filing.

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

News: Enviva announces Restructuring Agreements amid Chapter 11 proceedings

Invitae files for Chapter 11 protection

BY Fraser Tennant 

Following rumours of imminent bankruptcy, plummeting stock prices and its trading suspension and delisting on the New York Stock Exchange, medical genetics company Invitae has filed for Chapter 11 bankruptcy protection.

According to court documents, the company is approximately $1.5bn in debt and has estimated total assets of between $500m and $1bn. Invitae began taking steps to reduce its debt in 2022 by terminating 1200 employees, downsizing office space and testing labs, and selling off unprofitable, non-core businesses.

The company intends to transition into Chapter 11 without disrupting business operations, and is committed to serving its customers and patients and meeting its commitments to employees and vendors. It has also stated it is seeking court approval to use the cash it currently has on hand to fund the case.

“We have been working diligently over the past 18 months to improve our cash position by realigning our portfolio and focusing on our most impactful business lines,” said Ken Knight, president and chief executive of Invitae. “These strategic initiatives have accelerated our path to positive cash flow in order to realise our potential as an industry-leading genetics platform.

“However, we still need to address the company’s debt position through these Chapter 11 proceedings,” he continued. “I want to thank our incredibly talented and hard-working employees for their continued focus on our patients and customers.”

Trusted by millions of patients and their providers to deliver timely genetic information using digital technology, Invitae provides accurate and actionable answers to strengthen medical decision making for individuals and their families.

The company’s genetics experts apply a rigorous approach to data and research, serving as the foundation of their mission to bring comprehensive genetic information into mainstream medicine to improve healthcare for billions of people.

As it moves through the Chapter 11 process, Invitae has reiterated its intention to remain steadfast in its commitment to deliver innovative solutions that empower individuals to unlock the value of genomic insights to improve their health.

News: Invitae gets court approval for five-month bankruptcy sale

Brazilian airline GOL files for Chapter 11

BY Fraser Tennant

In a move that reflects the lingering challenges Latin American airlines face from the coronavirus (COVID-19) pandemic era, Brazilian low-cost carrier GOL filed for Chapter 11 bankruptcy.  

The company intends to use the Chapter 11 process to restructure its short-term financial obligations and strengthen its capital structure for long-term sustainability.

GOL’s Chapter 11 filing makes it the latest Latin American carrier to seek bankruptcy protection after the global pandemic, following sister company Avianca, Mexico's Aeromexico and Chile-based LATAM Airlines.

Despite challenges to its capital structure and lower aircraft availability, GOL’s operational performance remains strong. In the third quarter of 2023, the company delivered one of the best operating results for airlines in Latin America, and the fourth consecutive quarter of high and consistent operating margins.

The airline has stated that its business will continue as normal during the oversight process conducted by the US court and the company will honour commitments to business partners and suppliers for the goods and services provided on or after the date of the Chapter 11 filing.

“GOL has been making significant efforts to offer the best travel experience to customers, while improving its profitability and financial position,” said Celso Ferrer, chief executive of GOL. “We have made notable progress so far and we believe that this process will allow us to address the challenges generated by the pandemic, while maintaining the high standard of services we offer to customers.”

The company expects to emerge from the Chapter 11 process with a significant capital investment, including the new $950m in debtor in possession (DIP) financing, giving it the opportunity to expand its position as a leading airline in Latin America.

“With the support of the court-supervised process and the additional liquidity of DIP financing, our passenger and cargo flights, the Smiles loyalty programme and other company operations continue normally,” continued Mr Ferrer. “GOL will continue to offer safe, reliable and low-cost air travel services, providing the best experience to customers, who will be able to organize their trips in the way they always have.”

One of the leading airlines in Brazil and part of the Abra Group, since its founding in 2001 GOL has been the company with the lowest unit cost in Latin America, which has enabled the democratisation of air transport.

Mr Ferrer concluded: “We are confident that the measures being taken will allow GOL to continue offering lower fares with exceptional travel experiences to Customers on an increasing number of routes, including improving accessibility, the travel experience and customer choice.”

News: Heavily indebted Brazilian airline Gol files for bankruptcy in US

Air Methods emerges from bankruptcy protection

BY Richard Summerfield

Private equity-owned medical helicopter company Air Methods has successfully emerged from Chapter 11 bankruptcy protection with significantly reduced debt and increased liquidity.

The company, headquartered in Englewood, Colorado, was acquired by private equity firm American Securities in 2017. It filed for bankruptcy in late October 2023 with around $2.24bn in debt. Air Methods’ creditors were demanding around $1.3bn in payments, of which the company could only cover around 15 percent.

“Today marks an important inflection point for Air Methods in our transformation journey as we enter our next stage focused on investing in the business and executing on our growth initiatives for the benefit of our healthcare partners, communities, customers, and patients,” said JaeLynn Williams, chief executive of Air Methods. “With a stronger balance sheet and additional financial resources, we remain focused on serving our contractual partners, opening new greenfield bases, optimizing our field operations, expanding our frontline team, and going in-network with commercial insurers. We are well-positioned for long-term success and excited about the opportunities ahead.”

As part of the restructuring process, ownership of the business transitioned to the company’s lenders and noteholders upon emergence, as contemplated by the pre-packaged plan of reorganisation. Some of the new owners are investing approximately $185m of new capital. Air Methods will continue to provide services through its fleet of 365 medical helicopters and fixed-wing aircraft, operating from 275 bases and serving 47 states across the US.

The company aimed to complete its debt restructuring by the end of 2023, according to its court filings, and announced the successful completion its financial restructuring on 28 December. The restructuring saw the company cut around $1.7bn of its debt. In its filing, the company said its business had suffered due to high operating costs, rising interest rates and the enforcement of the US No Surprises Act, which banned surprise bills for out-of-network medical care and made it more difficult for the company to collect payment for services rendered.

Founded in 1980 to provide air transport for patients and urgent supplies, Air Methods’ troubles began after it was taken private by American Securities. Its finances were first sapped by having to increase salaries to attract and keep skilled employees.

News: Air Methods exits bankruptcy with $1.7 billion less debt

Western Global Airlines exits Chapter 11

BY Fraser Tennant   

Having struggled under a heavy debt load and weak market conditions, US cargo airline Western Global Airlines has exited the Chapter 11 bankruptcy process following the completion of a comprehensive financial restructuring plan.

Under the plan, the carrier has reduced its debt by more than $460m and infused significant new capital into the company, while preserving its workforce and long-term relationships with customers and suppliers.

The company, which operates chartered cargo jets for the US military and other customers, filed for Chapter 11 in August 2023, stating that it would restructure with the help of $77m in financing from creditors.

Over the course of 100 days, the company restructured its debt through an in-court process while continuing to operate without disruption. The restructuring included a cash award retention programme for nearly its entire workforce that drew upon $77.5m of debtor in possession (DIP) financing provided by its owners, Jim and Sunny Neff.

The owners also funded equity and exit financing, and waived nearly $100m of secured and unsecured prepetition debt held by them in order to provide recovery to all creditors.

"My top priority has always been to preserve the long-term viability of our company and protect our people,” said Jim Neff, founder and chief executive of Western Global Airlines. “I am pleased our restructuring process has achieved that. It continues to be a privilege to lead our team, especially as Western Global Airlines has emerged stronger and ready to thrive again as it has historically done.”

Headquartered in Estero, Florida, in only 10 years Western Global Airlines has become a leading, global logistics powerhouse, safely and reliably flying to over 400 airports in 135 countries on six continents on behalf of its diverse, blue chip client base in the logistics industry.

“As always, I am immensely grateful to our employees, customers and partners for their enduring support as we navigated the Chapter 11 process,” concluded Mr Neff. “I look forward to sharing the company's successes with our loyal employees and to continue to serve as a critical partner for our customers.”

News: US's Western Global Airlines exits Chapter 11