Canadian anaerobic digestion (AD) specialist Anaergia Inc (TSX:ANRG) said on Thursday that the majority-owned unit operating the Rialto waste-to-energy (WtE) plant in California has made a Chapter 11 bankruptcy protection filing after failing to secure enough revenue to cover costs and debt service due to a feedstock deficit.
The Rialto Bioenergy Facility (RBF) is described as the largest organic waste-to-energy plant in North America. It has the capacity to process up to 1,000 tonnes per day of organic waste and to convert it into up to 1 million MMBtu per year of carbon-negative renewable natural gas (RNG).
The Chapter 11 restructuring process will give RBF additional time and relief from debt service and other payments while it awaits the resumption of normal feedstock supply, Anaergia said in a press release on Thursday. It blamed the lack of feedstock on a delay in the implementation and enforcement of laws requiring organic waste diversion from landfills by the City of Los Angeles. The now-adopted implementation ordinance will be fully enforceable in January 2024.
As part of the Chapter 11 process, RBF plans to enter into a debtor-in-possession (DIP) financing facility with a lender to guarantee the continued operation of its business.
Anaergia, which owns 51% of RBF through one of its other subsidiaries, said it expects the RNG plant to retain its long-term value for investors during the process.
