Company files bankruptcy after getting millions in South Mississippi tax incentives
Reality Check is a Sun Herald series holding those in power to account and shining a light on their decisions. Have a suggestion for a future story? Email mynews@sunherald.com.
A company operating in South Mississippi that received millions of dollars in state and local incentives has filed for Chapter 11 bankruptcy to restructure its $2.6 billion debt.
Enviva, the largest supplier of wood pellets in the world, filed for bankruptcy on March 13.
The Maryland-based company continues to operate a $140 million plant in the George County Industrial Park in Lucedale and a $60 million shipping terminal in Pascagoula.
Under construction in South Mississippi is a $250 million facility in Bond, north of Wiggins in Stone County.
Enviva said in a March 12 statement that construction will continue at its mill in Epes, Alabama. But construction in Bond will be paused during the restructuring.
The company said it will “revisit restarting Bond, depending on the level of customer contracting, once it emerges from its in-court restructuring process.”
The plant originally was expected to open this year and provide 100 jobs.
The bankruptcy comes two months after Fitch Ratings downgraded Enviva’s default rating when the company missed a $24.4 million interest payment.
Among its debts, the company owes $780 million to a Delaware bank and $353 million in bonds from local development authorities in Mississippi and Alabama.
The mills turns trees into wood pellets that are shipped overseas to supply fuel for power plants in the United Kingdom, Asia and other countries.
While environmental activists and some neighbors protested the plants in Lucedale and Bond, the plants were welcomed by those who saw economic development in their communities, jobs and an opportunity for local landowners to have a market for their timber.
Mississippi Development Authority provided $4 million in grants for site development and infrastructure at Bond. Another $4 million was awarded for a water tank, well and other infrastructure in Lucedale. George and Stone counties also provided millions in incentives and tax breaks to bring jobs to the mostly rural counties
Enviva said in its statement that payback plans are in the works with an investment group that holds more than 92% of the bonds for the Mississippi plant.
