Cash-Starved Viridis Energy Restructures Debt

By Rich Christianson | Posted: 03/06/2013 1:48PM

 

VANCOUVER, BC - Viridis Energy Inc. (TSXV: VRD), a manufacturer and distributor of wood pellets to global residential and industrial markets, has completed a restructuring of its short-term debt with Cornwall Investments that will infuse approximately $5.7 million into the financially-strapped company.

Enligna Wood Pellets SiteViridis Energy purchased the Enligna wood pellet plant in Nova Scotia in February. Cornwall, Viridis Energy's largest investor, will provide a pair of non-revolving credit facilities. The first credit facility, totals $3,067,657. It will cover debt restructuring of Okanagen Pellet Company Inc. (OPC) and assumption of debt from HSBC Bank Canada.

The second facility, in the principal amount of $2,636,238, is an extension of the existing short-term facility in the original principal amount of $2,455,000 provided to Scotia Biomass Company, which it purchased in early 2012 and is currently in default.

Viridis sustained nearly $2.2 million in financial losses for its current fiscal year.

In consideration for the revised credit facility and subject to TSXV approval, Viridis will issue a total of 2,420,000 shares of its common stock  to Cornwall. As further security, Viridis has guaranteed the debt of OPC to Cornwall.

“The debt restructuring with Cornwall is an important step in the process that we began in December," said Christopher Robertson, chairman and CEO. "The deferment of interest and principal payments until maturity will further Viridis’ ability to generate working capital to support growth. In addition, the escrowed bonus share program provides Viridis the incentive to accelerate its plans for refinancing with a traditional lender over the next two years. Cornwall continues to demonstrate its support of Viridis as it develops its production capacity to capitalize on the Renewable Energy industry’s advancement.”

 

About the Author

Rich Christianson

Rich Christianson is Associate Publisher and Editor at Large of Woodworking Network. During his 25+ years covering the wood products industry, Rich has toured hundreds of manufacturing plants throughout North America, Europe and Asia. His reporting has covered everything from the state of the industry and impact of wood imports to technology and environmental issues. In his current capacity he is responsible for editing the daily Woodworking Network Update newsletter and coordinating events including the annual Cabinets & Closets Conference & Expo and Canada’s biennial Woodworking Machinery & Supply Expo. He can be contacted at rchristianson@woodworkingnetwork.com

Read more of Rich Christianson's blogs.


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