Enviva has completed the acquisition from its sponsor of Enviva Pellets Greenwood Holdings which, through its wholly-owned subsidiaries, owns a wood pellet production plant in Greenwood, South Carolina.
In connection with the Greenwood acquisition, Enviva’s sponsor has assigned five long-term, take-or-pay off-take contracts with ‘creditworthy’ Japanese counterparties that have maturities between 2031 and 2041, aggregate annual deliveries of 1.4 million tonnes per year and an aggregate revenue backlog of $5.3 billion (€4.6 billion).
The Greenwood facility has been operating since 2016 and its wood pellets are exported through Enviva’s terminal at the Port of Wilmington, North Carolina. In a statement made at the time, Shai Even, chief financial officer at Enviva, said: “A key pillar of Enviva’s growth is our ability to undertake accretive drop-down acquisitions from our sponsor, which we again demonstrated with the Greenwood transaction.”
Including the associated off-take contracts, Enviva’s total weighted-average remaining term of off-take contracts has increased from 11.4 years to 12.7 years and its total product sales backlog has increased from $10.2 billion (€8.9 billion) to $15.5 billion (€13.5 billion), as of 1 April.
To finance the Greenwood acquisition, as well as Enviva’s previously announced purchase of Georgia Biomass Holding, which, through its wholly-owned subsidiary, owns a wood pellet production plant in Waycross Georgia, Enviva has completed the issuance of an aggregate of 6,153,847 common units in a private placement in exchange for gross proceeds of $200 million (€175 million) on 23 June. The company also expects to close its previously announced private placement to eligible purchasers of $150 million (€131 million) in aggregate principal amount of 6.5% senior unsecured notes due 2026 on 15 July, subject to customary closing conditions.